Jobless Claims: Heavy Seasonal Adjustments Continue
July 30, 2020
Bottom Line: Claims rose but were a touch less than expected. Like the prior week, all of the increase can be attributed to a heavy seasonal adjustment factor. Unadjusted claims fell sharply. Seasonal adjustments will be increasingly difficult over the next six weeks as school staffing remains in flux, especially for non-teaching staff. For now, the trend looks to be improving just slightly after proving stubbornly high for over two months. Federal unemployment supplemental payments of $600 per month are set to expire at the end of the month. Additionally, anecdotal evidence suggests many businesses that benefited from PPP loans are starting to struggle again and may be forced to layoff workers. Despite that, our Nowcasting model, based on Google search data, suggests claims have edged lower this week after bottoming two and a half weeks ago. It indicated the current week ending Saturday and reported next Thursday would be down to 1.2 million. Jobless Claims ROSE by 12k during the week ended July 25th to 1434k, compared with market expectations for an increase to 1445k. The 4-week average ROSE by 6.5k to 1369k and the 13-week average FELL by 187.2k to 1831k. Continuing Claims ROSE by 867k during the week ended July 18th to 17,018k, after the prior week was revised slightly lower from 16,197k to 16,151k.The 4-week average FELL by 436k to 17,058k. On a non-seasonally adjusted basis, Continuing Claims ROSE by 537k to 16,882k during the week ended July 11st. The Insured Jobless Rate ROSE by 0.5% to 11.6% during the week ended July 18th. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.
Article by Contingent Macro Advisors