Weather continues to skew weekly jobless claims data

Weekly jobless claims jumped 25,000 in the latest week, which follows a 34,000 drop in the prior week, as the major winter storms that have rocked parts of the county continue to play havoc with the report.

The 4-week moving average edged up by 1,750 to 417,750, and continuing claims rose just 1,000 to 3.91 million.



The extreme volatility we are seeing in the weekly data and what I harped on last week (despite comments to the contrary by the Labor Department)is very likely related to the rough winter weather we’ve experienced in parts of the country.

Last week’s big drop likely occurred as some first-time filers were unable to file, pushing them into the latest week and skewing the data upward.

Now that we are seeing the rough winter storms subside, we may now have to take into account President’s Day this Monday. Though the government does adjust for seasonality brought on by holiday weekends, it is sometimes difficult to capture the nuances of individual government holidays, which can make the data somewhat suspect.

Hence, we might be forced to wait until the end of the month or early March, assuming no major weather events, before we get an accurate read on jobless claims.

I am confident, however, that once things shake out, claims should settle below 400,000, adding to the evidence that the recovery is broadening and the labor market is very slowly on the mend.