Initial weekly unemployment claims decreased to 391,000 this week. The 4 week moving average is getting close to the magic number of below 400,000, now at 402,000. Last week's initial unemployment claims, seasonally adjusted, was revised to 413,000.
The magic number to show job creation is at minimum, below 400,000 initial unemployment claims per week and most Economists will quote 375,000. Are we finally seeing initial claims drop off?
From the jobless claims report:
In the week ending Feb. 19, the advance figure for seasonally adjusted initial claims was 391,000, a decrease of 22,000 from the previous week's revised figure of 413,000. The 4-week moving average was 402,000, a decrease of 16,500 from the previous week's revised average of 418,500.
Initial unemployment claims are seasonally adjusted, although record blizzards are not your basic seasonal amounts. Yet this past week, there have been no significant and unusual weather events.
Below is the mathematical log of initial weekly unemployment claims, so one can get a better sense of the rise and fall of the numbers. A log helps remove some statistical noise, it's kind of an averaging. As we can see we have a step rise during the height of the recession, but then a leveling, not a similar decline. We have this yo-yo bobblehead, over 400,000 every week on initial claims, never ending labor malaise. Yet notice the tail, it appears a downward slope, a decline initial claims, is emerging in February.
Below is a graph of the percent change in initial weekly unemployment claims for the last year. Look at how the numbers change bobs around zero, up and down, like a yo-yo. Notice that the weekly change is still highly variable and noisy.
Below is the 4 week moving average, set to a logarithmic scale to remove even more statistical noise, for the last year. Here a trend that is certain would appear. It looks like we have a start, but keep your fingers crossed, wait and see. Again, we need the 4 week moving average to drop below 400,000 and keep dropping. Numerous economists say the number is 375,000 to show job growth. We see a strong decline, but remember the record highs. We need this number to keep dropping. That said, one can say a pattern has emerged of a downward progression in the 4 week moving average.
Below is a 2 year view of the 4 week moving average, set to a log scale. This shows while the immediate change looks promising, we are nowhere near pre-recession initial weekly unemployment claims levels.
In the week ending February 5th, there were 9,158,980 official people obtaining some sort of unemployment insurance benefit.