- Initial jobless claims 228K vs 200 K estimate. Prior revise it to 246K from 198K
- 4 week moving average initial jobless claims 237.75K vs 242K (revised up from 198.25K)
- continuing claims 1.823M vs 1.699M estimate. Last week came in at 1.689M revised up to 1.817M
- 4-week moving average of continuing claims 1.804M vs 1.793M (revised up from 1.692M)
Goldman reported that there would not be surprised to see a spike in initial jobless claims due to seasonal adjustments. They warned that the claims could spike up to 240,000 after adjusting for the seasonals instituted last year (which they feel artificially lowered claims). It seems to have pushed through.
The chart above now adjusts for the new seasonals. Note how the lows from earlier this year were near 200K and have been trending higher.
Below is the view from the just last week. Note how the trend was sideways and the number was mostly below 200K. Needless to say, the story is different given the adjusted view.
The Labor department did say:
REVISION TO SEASONAL ADJUSTMENT FACTORS
Beginning with the Unemployment Insurance (UI) Weekly Claims News Release issued Thursday, April 6, 2023, the
methodology used to seasonally adjust the national initial claims and continued claims reflects a change in the
estimation of the models.
Seasonal adjustment factors can be either multiplicative or additive. A multiplicative seasonal effect is assumed to be
proportional to the level of the series. A large increase in the level of the series will be accompanied by a proportionally
large seasonal effect. In contrast, an additive seasonal effect is assumed to be unaffected by the level of the series. In
times of relative economic stability, a multiplicative adjustment is generally preferred over an additive adjustment.
However, in the presence of a large level shift in a time series, multiplicative seasonal adjustment factors can result in
systematic over- or under-adjustment of the series. In such cases, additive seasonal adjustment factors are preferred
since they tend to track seasonal fluctuations more accurately in the series and lead to smaller revisions.
Prior to the pandemic, the unemployment insurance claims series used multiplicative models to seasonally adjust the
claims. Starting with March 2020, Bureau of Labor Statistics (BLS) staff, who provide the seasonal adjustment factors,
specified both of the UI claims series as additive. After the large effects of the pandemic on the UI series lessened, the
seasonal adjustment models were once again specified as multiplicative models. Statistical tests show that the UI series
should, in normal times, be estimated using multiplicative adjustments.
While the pandemic period remains within the five-year revision period, the UI series will be treated as a hybrid
adjustment. The most volatile economic period of the pandemic, including the period running from March 2020 to June
2021, was not revised and will continue to be based on additive adjustments. Before and after these periods, both series
are adjusted using multiplicative adjustments. For consistency, the published seasonal factors are presented as
multiplicative with additive factors converted to implicit multiplicative factors and will not be subject to revision.
Now that the pandemic impacts on the on the UI claims series are clearer, modifications have been made to the outlier
sets in the seasonal adjustment models for both of the claims series. This led to larger than usual revisions during many
weeks over the last 5 years, however, these changes should provide a more accurate picture of claims levels and patterns
for both initial and continued claims.
For further questions on the seasonal adjustment methodology, please see the official release page for the UI claims
seasonal adjustment factors or contact BLS directly through the Local Area Unemployment Statistics web contact form
/inflation
