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NSA Claims and the unemployment rate





A reader (brodero) that pays more attention than I do to the twists and turns of data has mentioned several times that there is a nice fit between the 52-week moving average of nonseasonally-adjusted weekly claims (which obviates the need for seasonal adjustment factors), which I show in the top chart (the magenta line being the moving average), and the unemployment rate, which I show in the bottom chart. Indeed there does seem to be a nice correlation between the two. The behavior of claims to date suggests that we could see a continued, if very gradual, decline in the unemployment rate, even if nonseasonally-adjusted claims do not fall below the 400K mark for the next year. It also suggests that, as I argued in my previous post, it is premature to conclude from this week's claims data that the economy is suddenly deteriorating.

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