Jobless claims spiked after the Department of Labor announces a change to the models for seasonal adjustments.
- Seasonally adjusted initial claims for the week ending April 1st were 228,000, this is actually a decrease of 18,000 from the previous week’s revised level. The previous week’s level was revised up by 48,000 from 198,000 to 246,000.
- Economists were expecting a bigger drop to 200k but they may have been basing that on the previous model which would have been a slight increase.
Continuing Claims. The seasonally adjusted insured unemployment for the week ending March 25 was 1,823,000, an increase of 6,000 from the previous week’s revised level and the highest level for insured unemployment since December 11th, 2021 when it was 1,833,000.
- The previous week’s level was revised up by 128,000 from 1,689,000 to 1,817,000.
Chatter. Before the number dropped, Twitter was abuzz with what the model change would mean for jobless claims. Most were highlighting the note from Goldman Sachs on the adjustment.
Of note: Goldman Sachs economists say in a note that they expect revisions to the seasonal adjustment of jobless claims will cause this week’s reported number (due out imminently) to surge to ~240k, from recent ~200k levels.— Neil Irwin (@Neil_Irwin) April 6, 2023
Obviously, the number was not as high as Goldman Sachs was thinking but the consensus seemed to be that we can expect a higher baseline number going forward.