Did you want the bad news, the “unexpected” news, or the butt-ugly news? Too bad; you’re getting all three, in four chunks.
The bad news is seasonally-adjusted initial unemployment claims spiked to 474,000 last week, its highest since mid-August 2010, with the rolling 4-week average climbing to 431,250, its highest since November 2010.
The “unexpected” news is Reuters, which once again broke out its favorite adjective to describe the POR Economy™, estimated that it would drop from the prior week’s initial reporting of 429,000 to 410,000.
The butt-ugly news, part 1 (from Tom Blumer), is that for the 8th consecutive week, the prior week’s numbers were revised upward. This time, it was from the aforementioned 429,000 to 431,000. I’ll sttate right now that the trend will, indeed, continue next week.
The butt-ugly news, part 2 (also from Tom), is that for the first time in at least a year, the non-seasonally adjusted initial jobless claim number is higher than that of the same week the prior year. Can you say, “Double-dip DEMpression”? I knew you could.
Revisions/extensions (7:53 pm 5/5/2011) - A comment from Tom on his blog reminded me of something a friend-of-a-friend used to do when he drove school buses, namely apply for unemployment during Easter vacation. I decided to go back through the historical record to see if the floating holiday is or isn’t reflected in the seasonal adjusting. It turns out that, over the previous 11 years (2000-2010) there is a rather consistent 2-week (usually; some years saw this effect only happen 1 week) period anchored by Easter saw an average 20,000-claim spike (each week) in initial jobless claims compared to surrounding weeks. Given that Easter is exceptionally late this year, the week-ending-4/23 jump to a now-adjusted 431,000 claims should have mostly been anticipated, though I would argue that it shouldn’t have been much more than 425,000 claims.
However, that does not explain the further jump in this report. The key is going to be the next two weeks. If initial jobless claims continue to be above the 425,000 line (and I fear they’ll be well above that), we’re back on the downward slide of the economy (as if we aren’t due to inflated gas prices and deflated dollar).