Unemployment Claims: ‘Tis the Season to File
Initial claims for unemployment insurance increased more than expected in the week ended December 7. Seasonally adjusted first-time claims increased by by 68,000, or 22.7 percent, to 368,000, above economist expectations for a more modest increase of about 25,000.
There are a couple of important things to point out about this week’s data right off the bat. First, the holiday season — from Black Friday to the new year — is one of the periods that statisticians adjust heavily for over at the Department of Labor. These adjustments attempt to smooth out seasonal fluctuations that could otherwise obscure cyclical or underlying trends.
It’s easy to see seasonal adjustment at work in this week’s data. The unadjusted number of initial claims for unemployment insurance was 461,422, an increase of 146,241, or about 46 percent from the previous week. Unadjusted claims for the week ended December 7 are also up about 7.5 percent compared to the same week last year.
This reveals that this week’s spike in unemployment claims is partially seasonal, but that seasonal factors alone aren’t the only influence on the labor market right now.