- by New Deal democrat
Initial jobless claims have been relatively subdued for the past month. Some have suggested that this is a byproduct of the large immigrant deportations which have recently taken place. Last week I noted that, “comparing the SA and NSA readings in the past several months suggests that [unresolved seasonality] has affected initial claims as well, with markedly fewer claims at the early July peak. But whereas NSA claims continued to decline through August last year, for the past three weeks this year they have held steady.”
This week’s report did not resolve the issue, but tilted it slightly back towards the unresolved seasonality argument.
Initial claims declined -5,000 to 229,000, while the four week average increased 2,500 to 228,500. With the typical one week delay, continuing claims declined -7,000 to 1.954 million:
It is interesting that during the recent weeks in which initial claims have declined, continuing claims have if anything drifted higher - again, suggesting that it is not a lack of immigrants making (initial, and then continuing) claims that is the main driver.
On a YoY basis, which is more important for forecasting, both the one week and four week average of initial claims were down -1.3%, while continuing claims were higher by 4.5%:
Note that in both 2023 and 2024, initial claims were declining all during August. This year on a SA basis they declined in late July and have instead trended higher during August. My suspicion is that within the next two weeks both the one week and four week average for initial claims will revert to being higher YoY once again. We’ll see.
Next week we will get the jobs report for August. Since jobless claims generally lead the unemployment rate, here’s the latest on what that comparison looks like, as YoY% changes:
One year ago the unemployment rate was 4.2% in August, declining to 4.1% in September. Last month it was also 4.2%. Initial claims suggest that it will remain 4.2% or perhaps decline to 4.1% in the next month or two, while the less leading but more comprehensive total of initial+continuing claims suggest it may rise to 4.3%.
