U.S. Unemployment Claims Fell in Latest Week

[mahatmakanejeeves]

Source: The Wall Street Journal.

ECONOMY U.S. ECONOMY
U.S. Unemployment Claims Fell in Latest Week
New measurement method could be a factor in weekly figures, along with slowly improving labor market

By Eric Morath
Updated Sept. 3, 2020 8:44 am ET

New applications for unemployment benefits fell last week, a possible sign of a slowly improving labor market and the impact of a new measurement method.

Weekly initial claims for jobless benefits fell by 130,000 to a seasonally adjusted 881,000 in the week ended Aug. 29, the Labor Department said Thursday. The number of people collecting unemployment benefits through regular state programs, which cover most workers, decreased by 1.24 million to about 13.3 million for the week ended Aug. 22.

The latest data is in line with a general trend of improvement since spring, but also reflects a new methodology to adjust for seasonal factors. Under the new method, updated seasonally adjusted data should be more in line with the unadjusted data, J.P. Morgan economist Daniel Silver said. Unadjusted claims have most weeks been lower than the more widely reported adjusted figure since early March.

Seasonal adjustments are meant to account for regular swings in layoffs that occur during certain times of the year, such as around holidays. The coronavirus, however, didn’t align with historical patterns and likely led seasonal adjustments to overstate the actual number of weekly unemployment claims, economists say.

A Labor Department spokesman said the new methodology will be applied to Thursday’s report and those released going forward. He said data published before the Thursday release won’t be revised at this time.

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Link to tweet

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Original post, before TWSJ. had posted an article:

Filings for jobless benefits fell to 881,000 last week, a possible sign of a slowly improving U.S. labor market and the impact of a new measurement method

Link to tweet

-- -- -- -- -- --

https://twitter.com/EricMorath

[e-mail]

[secondwind]

1. K&R for visibility

[mahatmakanejeeves]

2. From the source:

Last edited Thu Sep 3, 2020, 02:50 PM - Edit history (1)

https://www.dol.gov/ui/data.pdf

News Release
Connect with DOL at https://blog.dol.gov

TRANSMISSION OF MATERIALS IN THIS RELEASE IS EMBARGOED UNTIL
8:30 A.M. (Eastern) Thursday, September 3, 2020

REVISION TO SEASONAL ADJUSTMENT FACTORS

Beginning with the Unemployment Insurance (UI) Weekly Claims News Release issued Thursday, September 3, 2020, the methodology used to seasonally adjust the national initial claims and continued claims reflects additive factors as opposed to multiplicative factors.

Seasonal adjustment factors can be either multiplicative or additive. A multiplicative seasonal effect is assumed to be proportional to the level of the series. A sudden large increase in the level of the series will be accompanied by a proportionally large seasonal effect. In contrast, an additive seasonal effect is assumed to be unaffected by the level of the series. In times of relative economic stability, the multiplicative option is generally preferred over the additive option. However, in the presence of a large level shift in a time series, multiplicative seasonal adjustment factors can result in systematic over- or under-adjustment of the series; in such cases, additive seasonal adjustment factors are preferred since they tend to more accurately track seasonal fluctuations in the series and have smaller revisions.

Prior to September 2020, the seasonally adjusted unemployment insurance claims series used multiplicative seasonal adjustment factors. Starting in September Bureau of Labor Statistics staff, who provide the seasonal adjustment factors, specified these series as additive. In accordance with the usual practice, the seasonal adjustment models and factors will be reviewed at the beginning of each calendar year, when prior years of seasonally adjusted estimates will be subject to revision.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

SEASONALLY ADJUSTED DATA

In the week ending August 29, the advance figure for seasonally adjusted initial claims was 881,000, a decrease of 130,000 from the previous week's revised level. The previous week's level was revised up by 5,000 from 1,006,000 to 1,011,000. The 4-week moving average was 991,750, a decrease of 77,500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 1,068,000 to 1,069,250.

The advance seasonally adjusted insured unemployment rate was 9.1 percent for the week ending August 22, a decrease of 0.8 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 22 was 13,254,000, a decrease of 1,238,000 from the previous week's revised level. The previous week's level was revised down by 43,000 from 14,535,000 to 14,492,000. The 4-week moving average was 14,496,250, a decrease of 709,000 from the previous week's revised average. The previous week's average was revised down by 10,500 from 15,215,750 to 15,205,250.

{snip charts}

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 833,352 in the week ending August 29, an increase of 7,591 (or 0.9 percent) from the previous week. There were 179,516 initial claims in the comparable week in 2019. In addition, for the week ending August 29, 51 states reported 759,482 initial claims for Pandemic Unemployment Assistance.

The advance unadjusted insured unemployment rate was 9.0 percent during the week ending August 22, a decrease of 0.5 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 13,104,366, a decrease of 764,713 (or -5.5 percent) from the preceding week. A year earlier the rate was 1.1 percent and the volume was 1,566,934.

{snip charts; go to the top of page 3. I bolded this for emphasis.}

The total number of people claiming benefits in all programs for the week ending August 15 was 29,224,546, an increase of 2,195,835 from the previous week. There were 1,639,622 persons claiming benefits in all programs in the comparable week in 2019.

{snip the rest, until the last page. They've added a program contact.}

2020_revised_seasonal_factors.txt
2020_revised_seasonal_factors.xlsx
Weekly Claims Archives
Weekly Claims Data

U.S. Department of Labor news materials are accessible at http://www.dol.gov. The Department's Reasonable Accommodation Resource Center converts Departmental information and documents into alternative formats, which include Braille and large print. For alternative format requests, please contact the Department at [phone] (voice) or [phone] (federal relay).

U.S. Department of Labor
Employment and Training Administration
Washington, D.C. 20210
Release Number: USDL 20-1671-NAT

Program Contacts:
Thomas Stengle: [phone]
Kevin Stapleton: [phone]
Media Contact: [phone]

[still_one]

3. 881000 is a terrible number. More than 50 million Americans have filed for unemployment since the

start of the pandemic

[snowybirdie]

4. Well actually

The government has changed the way they compile the numbers this week. An obvious attempt at making the economy look better before the election.

[mahatmakanejeeves]

5. For comparison, here's last week's report from DOL's Employment and Training Administration

Last edited Thu Sep 3, 2020, 02:44 PM - Edit history (2)

The URL at DOL never changes. If you click on it, you'll get whatever is the newest report.

Thu Aug 27, 2020: From the source:

https://www.dol.gov/ui/data.pdf

News Release

Connect with DOL at https://blog.dol.gov

TRANSMISSION OF MATERIALS IN THIS RELEASE IS EMBARGOED UNTIL
8:30 A.M. (Eastern) Thursday, August 27, 2020

REVISION TO SEASONAL ADJUSTMENT FACTORS

Beginning with the Unemployment Insurance (UI) Weekly Claims News Release issued Thursday, September 3, 2020, the methodology used to seasonally adjust the national initial claims and continued claims will reflect additive factors as opposed to multiplicative factors.

Seasonal adjustment factors can be either multiplicative or additive. A multiplicative seasonal effect is assumed to be proportional to the level of the series. A sudden large increase in the level of the series will be accompanied by a proportionally large seasonal effect. In contrast, an additive seasonal effect is assumed to be unaffected by the level of the series. In times of relative economic stability, the multiplicative option is generally preferred over the additive option. However, in the presence of a large level shift in a time series, multiplicative seasonal adjustment factors can result in systematic over- or under-adjustment of the series; in such cases, additive seasonal adjustment factors are preferred since they tend to more accurately track seasonal fluctuations in the series and have smaller revisions.

Prior to September 2020, the seasonally adjusted unemployment insurance claims series used multiplicative seasonal adjustment factors. Starting in September Bureau of Labor Statistics staff, who provide the seasonal adjustment factors, specified these series as additive. In accordance with the usual practice, the seasonal adjustment models and factors will be reviewed at the beginning of each calendar year, when prior years of seasonally adjusted estimates will be subject to revision.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS
SEASONALLY ADJUSTED DATA

In the week ending August 22, the advance figure for seasonally adjusted initial claims was 1,006,000, a decrease of 98,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 1,106,000 to 1,104,000. The 4-week moving average was 1,068,000, a decrease of 107,250 from the previous week's revised average. The previous week's average was revised down by 500 from 1,175,750 to 1,175,250.

The advance seasonally adjusted insured unemployment rate was 9.9 percent for the week ending August 15, a decrease of 0.2 percentage point from the previous week's revised rate. The previous week's rate was revised down by 0.1 from 10.2 to 10.1 percent. The advance number for seasonally adjusted insured unemployment during the week ending August 15 was 14,535,000, a decrease of 223,000 from the previous week's revised level. The previous week's level was revised down by 86,000 from 14,844,000 to 14,758,000. The 4-week moving average was 15,215,750, a decrease of 604,000 from the previous week's revised average. The previous week's average was revised down by 21,500 from 15,841,250 to 15,819,750.

{snip charts}

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 821,591 in the week ending August 22, a decrease of 67,958 (or -7.6 percent) from the previous week. The seasonal factors had expected an increase of 12,140 (or 1.4 percent) from the previous week. There were 176,867 initial claims in the comparable week in 2019. In addition, for the week ending August 22, 51 states reported 607,806 initial claims for Pandemic Unemployment Assistance.

The advance unadjusted insured unemployment rate was 9.5 percent during the week ending August 15, a decrease of 0.2 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 13,909,872, a decrease of 272,941 (or -1.9 percent) from the preceding week. The seasonal factors had expected a decrease of 59,034 (or -0.4 percent) from the previous week. A year earlier the rate was 1.1 percent and the volume was 1,615,803.

{snip chart. Emphasis mine.}

The total number of people claiming benefits in all programs for the week ending August 8 was 27,017,232, a decrease of 1,042,323 from the previous week. There were 1,644,315 persons claiming benefits in all programs in the comparable week in 2019.

{snip the rest of the eleven-page news release, until the end}

Weekly Claims Archives
Weekly Claims Data

U.S. Department of Labor news materials are accessible at http://www.dol.gov. The Department's Reasonable Accommodation Resource Center converts Departmental information and documents into alternative formats, which include Braille and large print. For alternative format requests, please contact the Department at [phone] (voice) or [phone] (federal relay).

U.S. Department of Labor
Employment and Training Administration
Washington, D.C. 20210

Release Number: USDL 20-1532-NAT

Program Contacts:
Thomas Stengle: [phone]
Media Contact: [phone]

[BumRushDaShow]

6. "the impact of a new measurement method"

Like the coronavirus "X factor" (not the TV show).

the X factor

noun [ S ]

uk /ˈeks ˌfæk.tər/ | us /ˈeks ˌfæk.tɚ/

a quality that you cannot describe that makes someone very special:

https://dictionary.cambridge.org/dictionary/english/x-factor

The hospitality, travel, and tourism industry is sitting on tens of thousands (if not hundreds of thousands or more) of jobs that are being readied to eliminate. And that will impact all the ancillary jobs that support those industries. It was bad enough that the big food and other consumables industries had put a significant chunk of their business models and factories into "bulk" and were completely thrown off guard by what has been happening, unable to respond to the massive increase in retail demand and not being able to satisfy that due to so much of their stuff packaged for large institutions and wholesale.

[George II]

7. This is a reference to new claims. It means that less people lost their jobs last week than....

....it the previous week, but still 881,000 people lost their jobs. Also, the fact that 1.24 million less people are receiving unemployment benefits doesn't necessarily mean that they found jobs, just that they exhausted their benefits.

About 30 years ago I was unemployed for over a year - after six month, when I exhausted my benefits, according to the government I was no longer "unemployed" even though I still wasn't working.

The WSJ is sugarcoating this, it does NOT mean "trend of improvement".

[progree]

12. All programs continuing claims: went from 27.0 M to 29.2 M, +2.2 M

Also, the fact that 1.24 million less people are receiving unemployment benefits doesn't necessarily mean that they found jobs, just that they exhausted their benefits.

That's just the traditional state programs. It doesn't include the federal Pandemic Unemployment Assistance (PUA) program for gig and contract workers.

https://www.dol.gov/ui/data.pdf
To see all programs and the components, scroll down to the table, and to the "PERSONS CLAIMING UI BENEFITS IN ALL PROGRAMS (UNADJUSTED)" section of the table.

My title line is for the week ending August 8 and the week ending August 15 -- they have a 2 week lag in this statistic. And yes, its not seasonally adjusted, though I'm dubious about how well the traditional seasonal adjustment factors apply to the current situation, and I've seen an article where I'm not alone in questioning that -- e.g. the automakers who traditionally shut down in July or August (I forget which) to retool, did so back in March this year. Anyway, it's the best I can do

[Miguelito Loveless]

8. I don't understand how claims are falling

when every week more companies are laying people off.

[TomCADem]

9. Jobless claims fall to 881,000 but layoffs remain elevated

You can’t lay-off the same person twice. There was the initial hit due to lockdowns, but now the layoffs are due to continued economic conditions. Finally, there is a reason why Republicans want to cut back on unemployment benefits, because if you stop offering benefits, then less people might apply, which means you do not have a recession, right?

https://apnews.com/beb399767fd46f7264b43e07bf1cfeec

WASHINGTON (AP) — The number of laid-off Americans applying for unemployment benefits fell to a still-elevated 881,000 last week, evidence that the viral pandemic keeps forcing many businesses to slash jobs.

The latest figures, released Thursday by the Labor Department, suggest that nearly six months after the eruption of the coronavirus, the economy is still struggling to sustain a recovery and rebuild a job market that was devastated by the recession. In the previous week, more than 1 million had sought jobless aid.

All told, the government said that 13.3 million people are continuing to receive traditional jobless benefits, up from 1.7 million a year ago.

The nearly 1 million people who keep applying for unemployment aid each week point to a sluggish pace of improvement. Before the pandemic struck the economy in March, the number of people seeking jobless aid had never topped 700,000 in a week, not even during the depths of the 2007-2009 Great Recession. The economy has recovered 9.3 million, or only 42%, of the jobs that were lost in March and April.

[livetohike]

10. The Census workers were to be laid off by Aug 31. There

should be an increase in these numbers next week.

[progree]

11. All programs continuing claims: went from 27.0 M to 29.2 M, +2.2 M. MAGA!

https://www.dol.gov/ui/data.pdf

The total number of people claiming benefits in all programs for the week ending August 15 was 29,224,546, an increase of 2,195,835 from the previous week. There were 1,639,622 persons claiming benefits in all programs in the comparable week in 2019.

As mahatmakanejeeves pointed out, and bold-faced, in Reply #2 (and the previous report in Reply #5). THANKS!

This is the latest data - they have a 2 week lag on this statistic. I should point out the numbers in the above excerpt are NOT seasonally adjusted. They are not available in seasonally adjusted form, I don't know why.

But I thought I'd give it a "headline".

[Wuddles440]

13. Yes!

Your post reflecting the actual increase in total unemployment should be the headline. Many in the media and the DOL (with Ross as the puppet master) continue to spin the "positive" numbers and ignore the overall devastation. On again, this is all about trying to make the Orange Anus look good and especially so in campaign season.

[paleotn]

14. Fell?

Yea, from mindbogglingly horrid to horrendously bad. Some improvement.