After last week’s unexpected, and massive jump to 478,000 new unemployment claims, this week settled in at a high but expected 434,000 initial claims.
Please consider the Department of Labor Unemployment Insurance Weekly Claims Report for the week ending May 7, 2011.
In the week ending May 7, the advance figure for seasonally adjusted initial claims was 434,000, a decrease of 44,000 from the previous week’s revised figure of 478,000. The 4-week moving average was 436,750, an increase of 4,500 from the previous week’s revised average of 432,250.
Weekly Claims Moving Average Trending Higher for a Month
The report does not say but the 4-week moving average revision was higher by 1,000.
Seasonally Adjusted 4-Week Moving Average of Initial Claims
Unless there are downward revisions, next week the moving average will be higher again if the number of weekly claims exceeds 404,000.
4-Week Moving Average of Initial Claims
Note: The St. Louis Fed has not yet updated their data. That above graph does not show the revision last week or this week’s number. However, the trend is clearly up for a month and assuming another number around 436,000 next month, the 4-week moving average would jump to approximately 446,000.
Last Week’s Explanations Reviewed
Please consider U.S. Jobless Claims Unexpectedly Jump on Auto Shutdowns
The number of claims for U.S. unemployment benefits unexpectedly rose last week, pushed up by auto-plant shutdowns and other unusual events that seasonal variations failed to take into account, the Labor Department said.
A spring break holiday at schools in the state of New York prompted workers to file claims, which the seasonal adjustment factors didn’t expect last week, the Labor Department official said. In addition, Oregon began a new emergency benefits program for the long-term unemployed that also pulled in some new claimants, he said. Finally, auto plant shutdowns due to parts shortages caused by the earthquake and tsunami in Japan also contributed to the increase, the official said.
Last Week’s Excuse Evaluated
The data is now in to evaluate last week’s excuse. From this week’s report …
The largest increases in initial claims for the week ending April 30 were in New York (+24,431), Michigan (+3,948), Wisconsin (+3,746), North Carolina (+2,749), and Ohio (+2,319), while the largest decreases were in New Jersey (-4,004), California (-3,145), Massachusetts (-2,966), Puerto Rico (-2,713), and Florida (-2,156).
Oregon is not on the map so throw that bogus excuse out the window. While Michigan, Ohio, and Wisconsin are up a bit the total of all three states is 10,013. Together with New York, we have a grand total of 34,444, assuming the unlikely event that all of those claims were related to the excuses given.
If so, that would have put last week’s number at 443,556 or 50,000 higher than the recent bottoming at the 390,000 level.
440,000 is an elevated number, consistent with a slowing economy and the April jump in unemployment that mainstream media essentially disregarded.
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Mike “Mish” Shedlock
Global Economic Analysis