As I predicted last week, and a few weeks ago, today's reported decline in weekly claims for unemployment has got the market excited. Claims fell by more than expected, and bonds and stocks are reacting predictably to a positive growth shock. In reality, though, nothing has really changed as far as claims go—the past few months of claims gyrations have been all about seasonal adjustment factors.
The top chart shows seasonally adjusted claims, while the bottom chart shows the raw data. Claims actually rose a bit last week, but the rise wasn't as much as the seasonal factors expected (because not as many auto workers were laid off as is usually the case), so the adjusted number fell. This same pattern should be repeated over the next two weeks I believe, so stay tuned for more (seasonally adjusted) excitement.
Well done, Scott.
ReplyDeleteExcellent point...next weeks seasonal factor is 1.161 and the following week is 1.113....
ReplyDeleteAlso the 52 week moving average
ReplyDeleteof California's non seasonally
adjusted jobless claims continues
to move south...
One has to wonder about the benefit of looking at seasonally adjusted numbers if they are just based on estimates.
ReplyDeleteIndeed. All government stats must be taken with a grain of salt. Almost all are subject to revisions, bad seasonal adjustments, and/or delays.
ReplyDeleteI believe the statistical departments at the Labor department
ReplyDeleteand the Commerce department are the best in the world. The numbers require more homework than most
people want to put out to glean their full meaning.Don't throw the
baby out with bath water.
I believe zero of any government stat. They will say anything to raise more money to spend!
ReplyDelete