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Jobless Claims: Surprise Jump

October 15, 2020

Bottom Line: Jobless claims jumped last week, driven by what appears to be an anomalous increase in Indian and Illinois. There is also still an open issue of claims from the State of California, which were supposed to have been reported by now after a two-week hiatus to clean up backlogs, but were still assumed to be unchanged again.

Last week's non-seasonally adjusted tally, 885k, was above the forecast from our Nowcasting model, 802k. Interestingly, the model for this week, to be reported next Thursday, suggests claims should come back down. While not quite getting the magnitude of the last two weeks correct, the model did predict the increase over the last two weeks.

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

Jobless Claims ROSE by 53k during the week ended October 10th, 898k, compared with market expectations for a decline to 825k.The 4-week average ROSE by 8.0k to 866k and the 13 week average FELL by 31.5k to 1019k.

Continuing Claims FELL by 1165k during the week ended October 3rd to 10,018k, after the prior week was revised moderately higher from 1,767k to 11,183k.The 4-week average FELL by 682k to 11,482k.

On a non-seasonally adjusted basis, Continuing Claims FELL by 1188k to 9,632k during the week ended September 26th.

The Insured Jobless Rate FELL by 0.9% to 6.8% during the week ended October 3rd. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.

Article by Contingent Macro Advisors