Statistically, there are few things less “unexpected” than a continuation of the status quo. That is exactly what this week’s report on initial jobless claims shows, a slight bump upwards in both last week’s claims and an increase in the previous week’s estimate:
In the week ending June 18, the advance figure for seasonally adjusted initial claims was 429,000, an increase of 9,000 from the previous week’s revised figure of 420,000. The 4-week moving average was 426,250, unchanged from the previous week’s revised average of 426,250.
The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending June 11, unchanged from the prior week’s unrevised rate of 2.9 percent.
The advance number for seasonally adjusted insured unemployment during the week ending June 11 was 3,697,000, a decrease of 1,000 from the preceding week’s revised level of 3,698,000. The 4-week moving average was 3,709,500, a decrease of 5,250 from the preceding week’s revised average of 3,714,750.
It’s the eleventh week in a row that the number has been above 400,000 claims, after about a quarter of weekly claims coming in around the 380K level. To see the trend, let’s look at the series of seasonally-adjusted initial jobless claims since the midterm elections:
I’ve made the base for the chart the 325K number that analysts generally consider the high end of a job-creation range. As this shows, the changes over the past six weeks in this number have mainly been statistical noise. The relationship to a healthy level of weekly initial claims hasn’t really changed at all, but maintained the same relative distance from that range. Bouncing up and down a little from this range should hardly be “unexpected”; almost by definition, only a major shift from this range would be unexpected.
Well, that’s true everywhere but at Reuters, anyway:
New claims for unemployment benefits rose more than expected last week, a government report showed on Thursday, suggesting little improvement in the labor market this month after employment stumbled in May.
Initial claims for state unemployment benefits climbed 9,000 to a seasonally adjusted 429,000, the Labor Department said. The prior week’s figure was revised up to 420,000.
Economists polled by Reuters had forecast claims to edge up to 415,000 from a previously reported count of 414,000.
This strange — and entirely expected — analysis also added another weird claim:
Initial claims have now been above the 400,000 mark for 11 weeks in a row. Analysts normally associate that level with a stable labor market.
Really? Take a look at the historical series of weekly claims between December 2005 and December 2007, the last time we really had “stability” in the labor force. The highest number in that period was 355,000 in a week, and that was in December 2007 when the economy slid into recession. In fact, between January 2004 and January 2008, we had only two weeks of 400K-level weekly claims, both in September 2005, and they were very much the exception. The average for that four-year span is 326,735, and the median number is 324,000 — which is why I usually use the 325K number in my analyses. We actually didn’t get to the 400K level until July 2008, at which point no one considered the labor market “stable.”
Perhaps economic indicators wouldn’t be so surprising for Reuters if they spent more time looking at actual numbers and trends rather than engaging in hopeful spitballing.
Update: Think I’m fudging those baseline expectatations by using the supposedly “overheated” Bush economic expansion? Well, take a look at the same series for the four years between 1996 and 1999. The average number of initial jobless claims per week in that period was 321,986, and the median was 317,500. There was exactly one week of 400,000 or more claims in a week, and that took place in January 1996.