Wall Street Greek: Jobless Claims - How to Analyze the Data

Helping You Make Sense of Jobless Claims Data

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Jobless Claims

Weekly Jobless Claims have held above the 500K rate of labor market outflow, and a mess is piling up in the streets! This week's count kept up the troubling trend, as the Labor Department reported that 502K folks filed for unemployment benefits in the week ending November 7. That compared against a revised prior week count of 514K, and an economists consensus estimate for 512K, as surveyed by Bloomberg.

How to Analyze Jobless Claims - Making Sense of it All

Remember, we do not put much weight into economists' consensus forecasts for jobless claims, as week-to-week changes are not likely to be dramatic and economists know that (as do we). Therefore, not much time is put into the generation of these forecasts. Rather, economists look further ahead to more discernible monthly labor market forecasting.

As you follow the trend in this economic data, you are likely better served to note the four-week moving average changes over time. In this latest reporting, the four-week average improved slightly to 519,750, from the prior week's revised 524,250. As we take note of weekly changes, we can look toward specific industry or even corporate layoffs, but information will be mixed with too much noise for most of us to discern causal factors. Here in the four-week average data for jobless claims we find something more tangible and useful for the typical portfolio manager to understand what is going on in the overall labor market.

State Trends

As incumbent governors approach tough elections (facing blame and all), expect more turnover of party in states where unemployment is highest.

The highest insured unemployment rates in the week ending Oct. 24 were in Puerto Rico (6.4 percent), Oregon (5.4), Nevada (5.2), Pennsylvania (4.9), Alaska (4.8), Arkansas (4.8), California (4.8), Wisconsin (4.8), North Carolina (4.6), Michigan (4.5), and South Carolina (4.5).

The largest increases in initial claims for the week ending Oct. 31 were in Wisconsin (+1,501), Illinois (+1,390), Michigan (+1,135), Puerto Rico (+1,101), and Texas (+965), while the largest decreases were in California (-6,752), Florida (-3,409), Georgia (-2,686), New York (-2,067), and North Carolina
(-1,872).

Extended Benefits

We like to provide helpful information here along with what we hope is useful economic and financial markets analysis. So, for those of you receiving benefits:

Extended benefits were available in Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, and Wisconsin during the week ending Oct. 24.

Also Smart to Follow

You might keep track of the financial releases and conference calls from employment firms like Robert Half International (NYSE: RHI), Korn Ferry (NYSE: KFY), Monster Worldwide (NYSE: MWW), Manpower (NYSE: MAN) and others to color in missing facets to your analysis. Feel free to ask a question; we are here to help!