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US initial unemployment claims

This page is about initial claims under the US joint federal/state unemployment compensation system – a near-real-time measure of layoffs.

Summary

6 Aug 2014.

The 4 week moving average of seasonally adjusted initial claims (SA), at 297,250, is significantly down from the peak, and now towards the best end of the range existing in the previous recovery.

The year-over-year change in unadjusted claims normally leads the year-over-year change in non-farm payrolls by an average of 5 months. It correctly predicted that the rate of jobs gain would stop improving at a very low level, and continues to suggest fairly flat performance (Background).

Graphs

6 Aug 2014. Data through Jul 2014.

The first graph shows the weekly level of seasonally adjusted claims. The second graph shows the year-over-year change in the monthly average of unadjusted claims, inverted, compared to the year-over-year change in non-farm payrolls (also unadjusted). Initial claims data are from the DOL ETA. Click on either graph for a larger image.

Highlights

Highlights cover clippings below through 6 Nov 2009.

  • US unemployment claims background (20 May 2010) Initial unemployment claims are reported weekly and represent “real people standing in actual unemployment insurance lines … not based on samples with model guesstimates folded in” (Kasriel) and hence are a useful immediate indicator of emerging trends. The law on eligibility has changed substantially over time, and several other factors have brought about major shifts in uptake; thus the main emphasis should be on short-term trends. Claims are volatile; usually the YOY change or the four-week moving average is used; the YOY change has the advantage of at least roughly normalizing for changes in the rules and for population. Since coverage is short, the number of continuing claims, or 'insured unemployment', runs nearly parallel to initial claims; only one series need be followed. Initial claims tend to bottom several months before a recession starts and to peak at about the end of a recession. The YOY change in initial claims tends to lead the YOY change in non-farm payrolls by about 5 months, and to lead ISM manufacturing new orders by about three months. Various ranges of initial claims have been proposed as neutral for non-farm payrolls. None of these has strong support.

Sources

The data are all from Department of Labor, Employment and Training Administration:

See also