Thursday, January 12, 2012

Labor market update

Weekly unemployment claims last week were higher than expected (399K vs. 375K), but the miss was well within the range of error at this time of the year, when claims always post their biggest increases and seasonal adjustments can be tricky. As the chart above shows, the 4-week average of claims is still firmly within a declining trend.

December claims represented only 0.28% of payrolls, a level that was better than most of the go-go years of the 80s. Employers are firing fewer and fewer people, which suggests that businesses have undergone most of the restructuring and cost-cutting needed to survive. The jobs market is thus less vulnerable to future disruptions.

The number of people receiving unemployment insurance always rises at this time of the year, but relative to the same time last year, the number is down 18%, or 1.5 million people. This is undeniable progress, even though the ranks of the unemployed are still extremely high.


brodero said...

Despite the headline number the
jobless claims number was quite good today. The 52 week moving average of non seasonally adjusted
jobless claims dropped a large amount for a week from 405795 to
403332. On a second derivative basis the 12 week moving average of
non seasonally adj jobless claims is rising for this December at a slower pace that last December so
the drop of the 52 week moving average has been faster in the last
month also.Finally if the seasonal
factor (1.609) had been the same as last years (1.76) the number would have been 365,000.

Anonymous said...

I was wondering about that same seasonal adjustment thing when I read this on Seeking Alpha:

Jobless Claims Non Seasonally Adjusted

I wonder if they're trying to compensate for an expected surge in FedEx and UPS layoffs this time of year, that being a relatively new phenomenon?

Anyway, if all this is true, we will see the inevitable bounce-back in some future weeks.

Anonymous said...

As of yesterday, the 21-day moving average of withholding tax receipts was around $8.3 billion, whereas the same period last year it was just over $7.5 billion. Since this week is the week the BLS does both the establishment and household surveys, this bodes well for January's jobs report.