•  
  • New York 19:31
  • London 00:31
  • Barcelona 01:31
  • Tokyo 09:31
  • Sydney 11:31
  • SignUp | Login

Daily Global Commentary

0

0

Initial Jobless Claims Report – Seasonally Unadjusted Data Should Help to Overcome Distortions from Seasonal Adjustments

Thu, Jul 9 2009, 22:20 GMT
by Northern Trust Economic Research Department

Northern Trust


Initial Jobless Claims Report – Seasonally Unadjusted Data Should Help to Overcome Distortions from Seasonal Adjustments

Initial jobless claims fell 52,000 to 565,000 for the week ended July 4. Seasonal distortions arising from the smaller-than-expected layoffs in the auto sector and the holiday shortened week are cited as reasons for the large drop in the seasonally adjusted data.

Using seasonally unadjusted jobless claims numbers eliminates the problem of interpreting data with seasonal distortions. Seasonally unadjusted data indicate (see chart 2) that on a year-to-year basis, initial jobless claims advanced 56% in June vs. larger gains in the prior months. The peak appears to have occurred in February (86% yoy increase). Chart 2 points out that the worst in the labor market is most likely behind us.

Continuing claims, which lag initial claims by one week, increased 159,000 to 6.883 million and the insured unemployment rate rose to 5.1% from 5.0% in the prior week.

I have been answering questions about the unemployment rate and initial jobless claims in recent days. The July 9 edition of this comment included remarks about the unemployment rate. For purposes of economic analysis, initial jobless claims are a leading indicator (see chart 1) of turning points of business cycles. The number of initial jobless claims is one of the components of the Index of Leading Economic Indicators.

Here are some nitty gritty aspects about initial jobless claims I have gathered from the Department of Labor. Initial jobless claims are a weekly count of the number of people filing for unemployment insurance and states fund this program, with the unemployed eligible for 26 weeks of compensation, well known information. The Extended Benefits (EB) program, a statutory program, (20 weeks in duration) is funded by the federal government and is triggered if a state has a very high jobless rate (after 26 weeks under the state program). The Emergency Unemployment Compensation (EUC) program is a federally funded program which has been effective since June 30, 2008, with unemployed individuals eligible to stay in the program until May 2010 and new entrants permitted until December 31, 2009). This program consists of two tiers of duration of unemployment compensation -- 20 weeks and 13 weeks. The EUC program kicks in after the regular unemployment compensation period of 26 weeks has expired. States make decisions about when EUC and EB programs are applicable. Putting these different programs together, an unemployed individual in a state with a high unemployment rate can effectively receive unemployment compensation for 79 weeks. A spokesperson of the Department of Labor indicated that 19 states are using the EUC and EB programs.


Archive

Northern Trust Corporation  | 50 S. LaSalle. Chicago, IL 60675
http://www.northerntrust.com/ | webmaster@ntrs.com

Legal disclaimer and risk disclosure

The information herein is based on sources which The Northern Trust Company believes to be reliable, but we cannot warrant its accuracy or completeness. Such information is subject to change and is not intended to influence your investment decisions.

Related reports

U.S. Forex Market Commentary by GCI
Tue, Feb 9 2010, 22:21 GMT

USDJPY Chartist Analysis by FXBoss
Tue, Feb 9 2010, 15:45 GMT

USD lower pressured by Greek rescue hopes by Easy Forex
Tue, Feb 9 2010, 15:22 GMT

Euro is catching a breather on Tuesday by Wells Fargo Investments, LLC
Tue, Feb 9 2010, 14:54 GMT

London Gold Market Report by BullionVault.com
Tue, Feb 9 2010, 14:53 GMT

employment, indicator, fundbanks, highlighted

[ View All ]

Related content

Japan December machinery orders +20% MoM Vs 8% expectations
Forex Live | Tue, Feb 9 2010, 23:55 GMT

Australian February Westpac-MI consumer confidence index -2.6%
Forex Live | Tue, Feb 9 2010, 23:50 GMT

USD/JPY Current Price: 89.75
FXstreet.com | Tue, Feb 9 2010, 23:36 GMT

GBP/USD Current price: 1.5702
FXstreet.com | Tue, Feb 9 2010, 23:34 GMT

EUR/USD Current price: 1.3792
FXstreet.com | Tue, Feb 9 2010, 23:31 GMT

employment, indicator, fundbanks, highlighted

[ View All ]

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2010 "FXstreet.com. The Forex Market" All Rights Reserved.