Weekly Jobless Claims Fall as A New Methodology Applies


Both weekly initial jobless claims and continuing claims, which lag initial jobless claims by one week, declined, mainly reflecting a change in the methodology from the Labor Department.

Starting in September 3, 2020, instead of multiplying the unadjusted number by the seasonal factor, the Bureau of Labor Statistics (BLS) has decided to use the additive method to seasonally adjust the national initial claims and continued claims. Prior to September 2020, the multiplicative seasonal adjustment factors are used for the seasonally adjusted unemployment insurance claims series. However, given a large level shift in the current jobless claims due to the COVID-19 pandemic, the multiplicative method generates an inflated measure of the series after seasonal adjustment.

Instead, the additive method tends to more accurately track seasonal fluctuations in the series and has smaller revisions. Since historical data, prior to the data in this week’s release, have not yet been revised to reflect this new methodology for seasonal adjustment, this week’s data and historical data are not comparable and the drop in this week’s number should not be viewed as a sign of a significant improvement in labor market.

The U.S. Department of Labor released the Unemployment Insurance Weekly Claims Report for the week ending August 29. The number of initial jobless claims was at a seasonally adjusted level of 881,000. It was well below the all-time high of 6,867,000 in the week ended March 28, but remained at historically high. Weekly new claims brought the 24-week’s total to 59.3 million. The four-week moving average decreased to 991,750, from a revised average of 1,069,250 in the previous week.

Meanwhile, the number for seasonally adjusted insured unemployment (in regular state programs), known as continuing claims, decreased by 1,238,000 to a seasonally adjusted level of 13,254,000 in the week ending August 22. The four-week moving average declined to 14,496,250 from the previous week’s revised average of 15,205,250. The seasonally adjusted insured unemployment rate declined by 0.8 percentage point to 9.1% for the week ending August 22. The previous week’s rate was unrevised.

The U.S. Department of Labor also released the advanced number of actual initial claims under state programs without seasonal adjustments. The unadjusted number of advanced initial claims totaled 833,352 in the week ending August 29, an increase of 7,591 from the previous week.

The chart below presents the top 10 states ranked by the number of advanced initial claims for the week ending August 29. California, New York and Texas had the most advanced initial claims. California led the way with 236,874 initial claims, followed by New York with 63,355 initial claims and Texas with 56,759 initial claims. Meanwhile, Vermont, South Dakota and Wyoming had the least advanced initial claims across all the states.

Compared to the previous week, California, Texas and Louisiana had the largest increases in advanced initial claims for the week ending August 29. California reported an increase of 39,958 advanced initial claims. Texas increased by 4,607 and Louisiana increased by 2,086. Florida (-12,312), Georgia (-6,270), and Michigan (-4,889) had the largest decreases in advanced initial claims.


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