Initial jobless claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This morning's seasonally adjusted 232,000 initial claims was up 2,000 from the previous week's revised figure. The latest reading came in below the forecast of 235,000.
Here is the opening statement from the Department of Labor:
In the week ending May 27, the advance figure for seasonally adjusted initial claims was 232,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 229,000 to 230,000. The 4-week moving average was 229,500, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 250 from 231,750 to 232,000.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending May 20, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 20 was 1,795,000, an increase of 6,000 from the previous week's revised level. The previous week's level was revised down by 5,000 from 1,794,000 to 1,789,000. The 4-week moving average was 1,797,500, a decrease of 1,500 from the previous week's revised average. The previous week's average was revised down by 1,250 from 1,800,250 to 1,799,000.
The chart below is a snapshot of weekly initial unemployment insurance claims for this year.
Here is a closer look at the series since 2007, with a callout to the past 12 months. The four-week moving average which gives a clearer sense of the overall trend. The current four-week moving average is at 229,500, a decrease of 2,500 from the previous week's figure. This is the lowest four-week moving average in the past 11 weeks.
As we can see, there's a good bit of volatility in this indicator, which is why the four-week moving average is a more useful number than the weekly data. Here is the complete data series dating back to 1967.
Outside of the COVID spike, initial unemployment claims have never been greater than 700,000 for a given week. With that said, we've adjusted the y-axis on the chart below so that we can get a zoomed in view of the series where the COVID spike isn't as prominent.
The headline unemployment insurance data is seasonally adjusted, as are the charts above. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows the extreme volatility of the non-adjusted data (the green dots). The four-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).
Because of the extreme volatility of the non-adjusted weekly data, we can add a 52-week moving average to give a better sense of the secular trends. The chart below also has a linear regression through the data (red line), which we are currently below.
For an analysis of unemployment claims as a percent of the labor force, see this regularly updated piece The Civilian Labor Force, Unemployment Claims and the Business Cycle. Here is a snapshot from that analysis.
This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at VettaFi | Advisor Perspectives
Here's our complete list of monthly employment updates:
ADP Employment Report
Employment Situation Summary
Long-Term Trends by Age Group
Aging Work Force
Ratio of Part-Time and Full-Time Employment
Multiple Jobholders
Workforce Recovery Since the Recession
Civilian Labor Force, Unemployment Claims, and the Business Cycle
Read more updates by Jen Nash
