Friday, May 13, 2011
(This is a repeat of yesterday's post which seems to have been lost)
Last week I argued that the huge and unexpected rise in unemployment claims was most likely due to seasonal adjustment factors. Further, I predicted that if this were true then we would see claims fall back down in subsequent weeks. Today's number (which showed a decline of 40K) is right on track in confirming that diagnosis and prediction.
The top chart shows seasonally adjusted claims, while the bottom chart shows the raw, unadjusted data. In the raw data, we see there has been no meaningful rise in claims. The expected seasonal adjustment factors that would indicate a decline in the raw data didn't happen. Seasonal events don't always happen the way the seasonal adjustment factors expect, and this was one of those times. Expect to see further declines in the seasonally adjusted claims number in coming weeks.
Posted by Scott Grannis at 11:21 AM