Weekly Jobless Claims Headed Back in Right Direction

The U.S. Department of Labor released its weekly jobless claims on Thursday, showing a drop of 15,000 to 281,000. That is the good news. The bad news is that last week’s report of 297,000 was revised lower by only 1,000. That put the old 300,000 hurdle back in focus for the first time in weeks.

As we saw in the prior week, the Labor Department communication said that there were no special factors impacting this week’s initial claims.

Other data released showed that the advance seasonally adjusted insured unemployment rate was 1.6% for the week ending July 4, which is actually down by 0.1 percentage point from the prior week’s unrevised rate. Additional data were reported as follows:

The advance number for seasonally adjusted insured unemployment during the week ending July 4 was 2,215,000, a decrease of 112,000 from the previous week’s revised level. The previous week’s level was revised down by 7,000 from 2,334,000 to 2,327,000. The 4-week moving average was 2,264,000, a decrease of 2,500 from the previous week’s revised average. The previous week’s average was revised down by 1,750 from 2,268,250 to 2,266,500.

Where the jobless claims gets interesting is in the unadjusted data, and that may leave some wiggle room for what constitutes “adjusted” data:

The advance number of actual initial claims under state programs, unadjusted, totaled 344,002 in the week ending July 11, an increase of 40,416 (or 13.3 percent) from the previous week. The seasonal factors had expected an increase of 59,887 (or 19.7 percent) from the previous week. There were 370,559 initial claims in the comparable week in 2014.

In short, the adjusted claims were 281,000, but the unadjusted claims were 344,000. Does that seem like a wide discrepancy? It sounds a bit like the difference in tech earnings reports with adjusted or non-GAAP earnings per share versus GAAP earnings per share.

Weekly jobless claims have been hanging under 300,000 for long enough now that they generally are not considered as market movers. That being said, Fed Chair Yellen did speak this week, and the markets are looking for each and every little clue that they can regarding the coming interest rate hike cycle.