This week’s Unemployment Insurance Weekly Claims Report is remarkably close to last week’s data point, on a seasonally adjusted basis. I graphed the unadjusted and adjusted claims for the last 10 years to highlight the importance and meaning of that statement. Initial claims rose slightly to 434,000. Last week’s number was revised up 1,000. This was toward the low end of the Bloomberg consensus range of 420k to 470k. From the report:

In the week ending Jan. 2, the advance figure for seasonally adjusted initial claims was 434,000, an increase of 1,000 from the previous week’s revised figure of 433,000. The 4-week moving average was 450,250, a decrease of 10,250 from the previous week’s revised average of 460,500.

The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending Dec. 26, a decrease of 0.2 percentage point from the prior week’s unrevised rate of 3.8 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Dec. 26 was 4,802,000, a decrease of 179,000 from the preceding week’s unrevised level of 4,981,000. The 4-week moving average was 5,005,750, a decrease of 95,250 from the preceding week’s unrevised average of 5,101,000.

I had to start with the disclaimer about this being the seasonally adjusted numbers because the seasonal adjustment is rather important. If you click my above link, you will see a huge seasonal component at the beginning of each year. The underlying trend is still a bit noisy with the adjustment, but it is rather remarkable how separable the “trend” component is from the “seasonal” component. The trend doesn’t appear to be reversing; we still seem to be heading into a more stable employment environment.

If you know someone who has recently been canned, and odds are good that you do, the actual number of new claims is important. That number just shot up:

The advance number of actual initial claims under state programs, unadjusted, totaled 645,571 in the week ending Jan. 2, an increase of 88,000 from the previous week. There were 731,958 initial claims in the comparable week in 2009.

The advance unadjusted insured unemployment rate was 4.2 percent during the week ending Dec. 26, an increase of 0.3 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,479,110, an increase of 388,729 from the preceding week. A year earlier, the rate was 4.0 percent and the volume was 5,317,388.

Actual claims correspond to actual people, and it’s only a little consolation to be told that the pink slip in your hand is “seasonal.” It’s also little consolation to those nervous about layoffs to tell them that the stability of the jobs market is better than this time last year. We’re still as bad as during the worst part of the 2001 recession. The stability is improving, though, and it’s possible that we’ll see jobs added to the monthly reports as early as tomorrow (unfortunately, these jobs may only be seasonal adjustments). There will be a lot of hiring for the census, and though it won’t do much for the unemployment rate (don’t ask, it’s a methodology thing), it will add a real paycheck to the bank accounts of tens of thousands of people.

One thing that I should draw attention to is how close to Armageddon we came.  There was a risk of having all extended benefits expire on January 1 due to some poorly drafted legislation. How many people would have suddenly lost their only source of income?

States reported 5,143,410 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending Dec. 19, an increase of 235,626 from the prior week. There were 1,922,488 claimants in the comparable week in 2008. EUC weekly claims include first, second, third, and fourth tier activity.

We think of having a few hundred thousand people lose their jobs in a week is bad in terms of human suffering. Imagine having a few million lose their only income on the same day.

The good / bad lists don’t look terrible yet. This data corresponds to the week of Christmas.

The good list (-1000 or more): CA, TX, GA, FL, NC, AZ, NY, NV, CO, LA, CT, OK

The bad list (+1000 or more): TN, MD, AR, MO, NJ, IL, WI, MA, MI, OH, KS, IN, KY, PA

PA (the worst) was +9,653 vs CA (the best) at -23,160. That indicates a greater volatility in the data than we’ve seen in a while (though remember this is unadjusted data heading into a seasonally unusual time). Construction and manufacturing get most of the blame, with a little blame towards warehousing. This makes sense, inventories are running low, and no retailers were holding extra inventory after the holiday shopping season.

The seasonally adjusted numbers might be sustained under 500k. I still see a need for this number to fall below 400k as a foundation for jobs growth. However, there is a real possibility of tomorrow’s employment situation report showing a positive number. I have some hope for the new year.

-By crazynutjob.

Read all of crazynutjob’s unemployment report recaps here.