- by New Deal democrat
The good news is, we are back to the normal weekly jobless claims releases. The really good news is that this week’s number, except for one week in 2022, was a new 50 year low! The bad news is that Holiday seasonality is very much in play, so take the good news with multiple grains of salt.
To give you an idea of how much seasonality, look at the decline that was seasonally “expected” vs. the actual number, per this week’s report:
“The advance number of actual initial claims under state programs, unadjusted, totaled 197,221 in the week ending November 29, a decline of 49,419 (or 20.0%) from the previous week. The seasonal factors had expected a decrease of 21,172 or -8.0% from the previous week.”
But to the numbers: seasonally adjusted initial claims declined -27,000 to 191,000 last week, and the four week moving average declined -9,500 to 214,750. With the typical one week delay, continuing claims declined -4,000 to 1,939,000:
To show you the seasonality at work, here are the last two years starting November 1 of non-seasonally adjusted claims (orange) vs. seasonally adjusted (blue):
A big decline in claims always occurs during Thanksgiving week. This year’s decline was signficantly bigger than the two prior years.
As per usual, the YoY% changes are more important for forecasting purposes. So measured, initial claims were down -15.1%, the four week average down -1.9%, and continuing claims up 3.6%:
Needless to say, this is positive. But I strongly suggest we wait for next week’s inevitable big seasonal increase, and average the numbers before popping any champagne corks.
