New jobless claims spike upward …

It’s been a while since we’ve taken a look at the weekly jobless claims report.  Throughout 2010, the figure stayed in a narrow range centered on 450,000 new claims per week, but the last few months, the range dropped down to about the 380,000 level.  The burst of hiring at the end of the year seemed to have move the needle a little, although the level of claims still stayed significantly above the consensus break-even range of 300K-325K.

This week, though, new jobless claims rose sharply back into the 400K range (via Steve Eggleston):

In the week ending April 9, the advance figure for seasonally adjusted initial claims was 412,000, an increase of 27,000 from the previous week’s revised figure of 385,000. The 4-week moving average was 395,750, an increase of 5,500 from the previous week’s revised average of 390,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending April 2, a decrease of 0.1 percentage point from the prior week’s unrevised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending April 2 was 3,680,000, a decrease of 58,000 from the preceding week’s revised level of 3,738,000. The 4-week moving average was 3,728,750, a decrease of 20,750 from the preceding week’s revised average of 3,749,500.

Reuters has ample reason to break out its favorite economic-indicator word, and they use it in both the lead and the headline:

New U.S. claims for unemployment benefits unexpectedly rose last week, bouncing back above the key 400,000 level, a government report showed on Thursday.

Initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 412,000, the Labor Department said.

Economists polled by Reuters had forecast claims slipping to 380,000. The prior week’s figure was revised up to 385,000 from the previously reported 382,000.

Frankly, I’d call this “unexpected” too.  There hasn’t been any obvious indicators of sudden weakening in the job market, although the increased costs of energy might dampen job creation in the long run.  Consumer spending increased in March, up 0.6% when gas prices and auto sales are discarded.  There is little reason to believe that the annualized GDP number for 2011Q1 will have dropped in comparison to 2010Q4′s 3.1%.

So where did the jump come?  I’m tempted to call this a statistical anomaly, at least until we take a look at a few more weeks’ data.  We saw temporary spikes in last year’s otherwise-predictable level of weekly jobless claims, too  On a few occasions, the number spiked above 500,000, but it didn’t stay at that level.  The spike here is mainly notable for crossing the 400K line as opposed to the value of the increase itself (27K).

If this does signal a trend, though, and we return to the 400K range for weekly claims, expect both sides to hammer the Keynesian lines.  Democrats will blame it on curtailing government “investment” and Republicans will blame it on a lack of confidence in current economic policy.  Those attack lines will be anything but “unexpected.”

Blowback