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Jobless Claims: Stubbornly High

October 8, 2020

Bottom Line: Jobless claims fell only slightly last week, but data from the State of California was assumed to be unchanged fro the second week in a row after the state announced a two-week pause in its processing of initial claims for unemployment insurance benefits to process backlogs and implement a fraud protection system.

Last week's non-seasonally adjusted tally, 804k, was above the forecast from our Nowcasting model, 772k. Interestingly, the model for this week, to be reported next Thursday, suggests an increase in claims this week. It also shows that claims have risen slightly for the last two weeks, which might indicate that the official claims data will be revised higher once California reports data.

Overall, claims are proving stubborn around the 800k per week level on an unadjusted basis, a sign that labor market improvement may be stalling.

Jobless Claims FELL by 9k during the week ended October 3rd to 840k, compared with market expectations for an increase to 820k. The 4-week average FELL by 13.3k to 857k and the 13-week average FELL by 36.2k to 1050k.

Continuing Claims FELL by 1003k during the week ended September 26th to 10,976k, after the prior week was revised moderately lower from 13,385k to 11,979k. The 4-week average FELL by 642k to 12,112k.

On a non-seasonally adjusted basis, Continuing Claims FELL by 1020k to 11,411k during the week ended September 19th.

The Insured Jobless Rate FELL by 0.6% to 8.1% during the week ended September 26th. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.

Article by Contingent Macro Advisors