Thursday, October 5, 2017

Hurricane adjusted initial jobless claims for the week of September 23: 246,000

 - by New Deal democrat

I am repeating an exercise I undertook in 2012 when Superstorm Sandy disrupted the initial claims data: estimating what the initial jobless claims would have been, but for the hurricanes.

I created that adjustment by backing out the affected states (NY and NJ) from the non-seasonally adjusted data, which gave me the number of initial claims filed in the other 48 states.  I compared that with the same metric one year earlier, and multiplied by the seasonal adjustment to arrive at the number if the affected states had the same relative number of claims during the given week, as all of the unaffected states.

This tells us whether or not the hurricane disruptions are masking any underlying weakness in the economy.

This year I backed out Texas starting 3 weeks ago, and added Florida two weeks ago.  This week I have added Puerto Rico.

The state by state data is released with a one week delay.  So what follows is the analysis for the week of September 23, the number for which was reported at 272,000.

Here is the table for the Week of September 24 in 2016 vs. September 23 this year:

Metric                              2016                   2017
Seasonally adjusted:       252,000              272,000
Adjustment for total:       1.27                   1.26
Not seasonally adjusted:  198,455             215,031 
Florida claims:                 7,255                 18,477
Puerto Rico claims:          1,229                 2,489*
Texas claims:                   14,694               20,104                
NSA claims ex-FL,TX,PR:175,277           173,961
FL, TX, PR as % of total: 11.7%                   n/a
2017 w/ FL,TX, PR adjustment:  n/a          194,314

*The Department of Labor estimated the number of claims for Puerto Rico last week.

In 2016 the weekly seasonal adjustment was 1.27. This year it was 1.26 Multiplying the non-seasonally adjusted total of 194,314 by 1.27 gives us 247,000. Multiplying by 1.26 gives us 245,000.

Thus the hurricane-adjusted initial jobless claims number for the week of September 23, 2017 is 246,000.

Here are the hurricane-adjusted numbers for previous three weeks:
Sept. 2:  239,000.
Sept. 9:  229,000.
Sept. 16: 237,000

The four week hurricane adjusted average is 237,750.

The underlying national trend in initial jobless claims remains very positive.