Washington, D.C., USA : In the week ending October 27, the advance figure for seasonally adjusted initial claims was 214,000 (vs 213,000 expected), a decrease of 2,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 215,000 to 216,000.
The 4-week moving average was 213,750, an increase of 1,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 211,750 to 212,000.
On Friday, the Labor Department is scheduled to release its closely watched report on the employment situation in the month of October.
Employment is expected to climb by 190,000 jobs in October after rising by 134,000 jobs in September, while the unemployment rate is expected to hold at 3.7 percent.
Seasonally Adjusted Data
The advance seasonally adjusted insured unemployment rate was 1.1 percent for the week ending October 20, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 20 was 1,631,000, a decrease of 7,000 from the previous week’s revised level. This is the lowest level for insured unemployment since July 28, 1973 when it was 1,603,000. The previous week’s level was revised up 2,000 from 1,636,000 to 1,638,000. The 4-week moving average was 1,640,750, a decrease of 6,250 from the previous week’s revised average. This is the lowest level for this average since August 11, 1973 when it was 1,627,250. The previous week’s average was revised up by 500 from 1,646,500 to 1,647,000.
The advance number of actual initial claims under state programs, unadjusted, totaled 197,518 in the week ending October 27, a decrease of 1,215 (or -0.6 percent) from the previous week. The seasonal factors had expected an increase of 1,299 (or 0.7 percent) from the previous week. There were 215,977 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.0 percent during the week ending October 20, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,383,254, an increase of 12,502 (or 0.9 percent) from the preceding week. The seasonal factors had expected an increase of 18,015 (or 1.3 percent) from the previous week. A year earlier the rate was 1.1 percent and the volume was 1,608,736.
The total number of people claiming benefits in all programs for the week ending October 13 was 1,396,440, an increase of 22,033 from the previous week. There were 1,637,584 persons claiming benefits in all programs in the comparable week in 2017.
No state was triggered “on” the Extended Benefits program during the week ending October 13.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,009 in the week ending October 20, an increase of 119 from the prior week. There were 623 initial claims filed by newly discharged veterans, an increase of 3 from the preceding week.
There were 7,441 former Federal civilian employees claiming UI benefits for the week ending October 13, an increase of 408 from the previous week. Newly discharged veterans claiming benefits totaled 7,237, an increase of 252 from the prior week.
The highest insured unemployment rates in the week ending October 13 were in Alaska (1.9), New Jersey (1.9), Puerto Rico (1.7), California (1.6), Connecticut (1.6), Pennsylvania (1.4), the District of Columbia (1.3), Illinois (1.3), Nevada (1.3), and the Virgin Islands (1.3).
The largest increases in initial claims for the week ending October 20 were in Florida (+3,987), Georgia (+3,668), New Jersey (+836), New York (+638), and Texas (+620), while the largest decreases were in North Carolina (-1,061), Tennessee (-900), California (-829), Kansas (-482), and Wisconsin (-352).
Why Markets Care About Unemployment Insurance Weekly Claims
Unemployment Insurance Weekly Claims – also called Jobless Claims or Initial Claims – measures the number of individuals who filed for unemployment insurance for the first time during the past week.
Unemployment Insurance Weekly Claims is the nation’s earliest economic data. The market impact fluctuates from week to week – there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes.
The usual effect is that if ‘Actual’ is less than ‘Forecast’, it is good for the dollar and vice versa.
Markets care because although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health since consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy.
An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility.
Continued Weeks Claimed
A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. Continued claims are also referred to as insured unemployment. The count of U.S. continued weeks claimed is also a good indicator of labor market conditions.
Continued claims reflect the current number of insured unemployed workers filing for UI benefits in the nation. While continued claims are not a leading indicator (they roughly coincide with economic cycles at their peaks and lag at cycle troughs), they provide confirming evidence of the direction of the U.S. economy
Seasonal Adjustments and Annual Revisions
Over the course of a year, the weekly changes in the levels of initial claims and continued claims undergo regularly occurring fluctuations. These fluctuations may result from seasonal changes in weather, major holidays, the opening and closing of schools, or other similar events. Because these seasonal events follow a more or less regular pattern each year, their influence on the level of a series can be tempered by adjusting for regular seasonal variation. These adjustments make trend and cycle developments easier to spot. At the beginning of each calendar year, the Bureau of Labor Statistics provides the Employment and Training Administration (ETA) with a set of seasonal factors to apply to the unadjusted data during that year. Concurrent with the implementation and release of the new seasonal factors, ETA incorporates revisions to the UI claims historical series caused by updates to the unadjusted data.
Other Economy News : U.S. Labor Productivity Growth Slows To 2.2% In Q3
Labor productivity growth in the U.S. slowed in the third quarter, according to a report released by the Labor Department on Thursday, with the report also showing a rebound in unit labor costs.
The Labor Department said labor productivity climbed by 2.2 percent in the third quarter after jumping by 3.0 percent in the second quarter. Economists had expected productivity to increase by about 2.0 percent.
The slowdown in productivity growth came as output showed another significant increase, but the pace of growth slowed to 4.1 percent in the third quarter from 5.0 percent in the second quarter.
The report also said hours worked increased by 1.8 percent in the third quarter after surging up by 2.0 percent in the second quarter. Productivity is a measure of output per hour.
Meanwhile, the Labor Department said unit labor costs shot up by 1.2 percent in the third quarter after slumping by 1.0 percent in the second quarter. The rebound in labor costs matched economist estimates.
The increase in labor costs came as hourly compensation spiked by 3.5 percent in the third quarter after jumping by 1.9 percent in the second quarter.
Real hourly compensation, which takes changes in consumer prices into account, climbed by 1.4 percent in the third quarter after edging up by 0.3 percent in the previous quarter.
Compared to the same quarter a year ago, productivity was up by 1.3 percent in the third quarter, as output jumped by 3.7 percent and hours worked increased by 2.4 percent.
Unit labor costs were up by 1.5 year-over-year amid a 2.8 percent surge in hourly compensation. Real hourly compensation was up just 0.1 percent year-over-year.