Thursday, July 9, 2009

Seasonal adjustments account for drop in jobless claims

Weekly jobless claims fell an unexpectedly-large 52,000 to 565,000, the lowest reading since early January.  The four-week moving average, which smoothes out the volatile series of data, continued on its downward path, falling 10,000 to 606,000.

Good news? Yes, but any enthusiasm should be tempered by the difficulties in accounting for seasonal adjustments this time of year.

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Bloomberg News and Reuters reported that a Labor Department spokesman said that earlier-than-normal shutdowns by automakers for retooling to get set for new models were a big factor in the drop.

But the chart above does reflect that the worst in job losses is over and the decline did help stocks in early action. 

Separately, continuing claims jumped 159,000 to 6.88 million, highlighting the struggle unemployed workers are having landing new jobs. Businesses may be letting fewer workers go, but they aren’t yet in a hiring mood.

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