Why it's super nuts to watch weekly initial unemployment claims

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Last week we declared watching the initial weekly unemployment claims numbers was just nuts. This week we've upped it to super nuts. Why?

Because the numbers are then revised after the press release and there is so much noise in these statistics one cannot jump for joy (or cry in your beer depending) on these reports weekly press statements.

Take this week for example.

In the week ending Sept. 5, the advance figure for seasonally adjusted initial claims was 550,000, a decrease of 26,000 from the previous week's revised figure of 576,000. The 4-week moving average was 570,000, a decrease of 2,750 from the previous week's revised average of 572,750.

The advance seasonally adjusted insured unemployment rate was 4.6 percent for the week ending Aug. 29, a decrease of 0.1 percentage point from the prior week's unrevised rate of 4.7 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Aug. 29 was 6,088,000, a decrease of 159,000 from the preceding week's revised level of 6,247,000. The 4-week moving average was 6,182,500, a decrease of 37,750 from the preceding week's revised average of 6,220,250.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.617 million.

Sounds good right? Dramatic decrease? Well, last week's report makes the decline 20k, not 26k initial claims. Then because the moving average was revised, they report a 4 week moving average decrease. But last week's moving average was 571,250, so they revise the moving average upward and wala, it looks more like a decrease.

This is why one must take a lot of data points on unemployment statistics and not go nuts over one week's report. The absolute numbers on initial weekly unemployment claims is still in deep recession turf. That's the bottom line here.

Or borrowing Economist Brad Delong's graph, we should reiterate his conclusion on the overall absolute levels, sigh.

weekly initial unemployment claims

Src: Brad Delong, click on graph to enlarge

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I'm not posting any more intial unemployment claims, this is why

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this week

Now check out this pattern.

In the week ending Sept. 12, the advance figure for seasonally adjusted initial claims was 545,000, a decrease of 12,000 from the previous week's revised figure of 557,000. The 4-week moving average was 563,000, a decrease of 8,750 from the previous week's revised average of 571,750.

The advance seasonally adjusted insured unemployment rate was 4.7 percent for the week ending Sept. 5, an increase of 0.1 percentage point from the prior week's unrevised rate of 4.6 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Sept. 5 was 6,230,000, an increase of 129,000 from the preceding week's revised level of 6,101,000. The 4-week moving average was 6,180,250, a decrease of 5,500 from the preceding week's revised average of 6,185,750.

See? Each week they revise, upward the past weeks claims, making it looks like initial claims are dropping more than they actually are.

See? Last week it was 550,000, now revised to 557,000, which makes the reported drop of 12k when it really is more like 5k.

I've been writing these and reading these weekly reports for a few months now and this pattern is consistent.

So, I'm finding these very misleading and will wait for the statistics to "solidify" more instead of just giving the DOL another misleading headline trying to imply the unemployment situation is better than it really is.

weekly initial unemployment claims, does look like a drop

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initial unemployment claims.

In the week ending Sept. 19, the advance figure for seasonally adjusted initial claims was 530,000, a decrease of 21,000 from the previous week's revised figure of 551,000. The 4-week moving average was 553,500, a decrease of 11,000 from the previous week's revised average of 564,500.

The advance seasonally adjusted insured unemployment rate was 4.6 percent for the week ending Sept. 12, a decrease of 0.1 percentage point from the prior week's unrevised rate of 4.7 percent.

I mentioned I wasn't going to post these in an Instapopulist anymore because there are too many games and revisions.

I might switch this to an "open thread" where I just put in the comments the lastest data.

But I went and look over the revisements and it does appear we had a good drop (for real) in the SA weekly initial unemployment claims.

Keep your fingers crossed because lord knows unemployment rates are the issue here.

We ain't blowin' these off like "some" who think firing people right and left is great for corporate profits.