A Close Look At U.S. Employment

The Unemployment Insurance Weekly Claims Report was released this morning for last week. The 336,000 new claims number was a 9,000 decline from the previous week's 345,000 (an upward revision from 340,000). The less volatile and closely watched four-week moving average, which is usually a better indicator of the trend, declined by 9,250 to 348,250.

The financial press (e.g., Reuters) reports that decline in new claims was to some extent attributable to California resolving its computer glitches after a major upgrade a few weeks ago. In today's report California new claims dropped by 13,033.

Here is the opening of the official statement from the Department of Labor:

In the week ending November 2, the advance figure for seasonally adjusted initial claims was 336,000, a decrease of 9,000 from the previous week's revised figure of 345,000. The 4-week moving average was 348,250, a decrease of 9,250 from the previous week's revised average of 357,500.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending October 26, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 26 was 2,868,000, an increase of 4,000 from the preceding week's revised level of 2,864,000. The 4-week moving average was 2,866,000, a decrease of 8,500 from the preceding week's revised average of 2,874,500.

Today's seasonally adjusted number came in slightly above the Investing.com forecast of 335K.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the trend in recent weeks.

A Four-Year Comparison

Here is an overlay of the past three calendar years and the beginning of 2013 using the 4-week moving average. The purpose is to show the relative annual slope of improvement since the peak in the spring of 2009. This year got off to an excellent start. It then oscillated a bit, stalled for about nine weeks and then headed lower from early July until October. After four reports in the wrong direction (largely resuting from computer upgrades in some states), the trend is on the mend.

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For an analysis of unemployment claims as a percent of the labor force, see my recent commentary Unemployment and the Market Since 1948 .