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Making claims out of thin air (cont.)

Two weeks ago I argued that the large and unexpected rise in unemployment claims that occurred in April was likely the result of faulty seasonal adjustment factors—which expected a decline in unadjusted claims that failed to materialize—and predicted that claims would retreat in coming weeks. Fortunately, that's exactly what has happened.

The top chart shows the seasonally adjusted series, while the bottom chart shows the unadjusted data. Now that the seasonal dust has largely settled, we see that the supposed rise in claims was a statistical artifact that had nothing to do with what was going on in the economy. Case closed.

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