Weekly initial jobless claims jumped 36,000 in the latest week to 482,000, easily exceeding the forecast offered by Bloomberg of 440,000. The 4-week moving average rose 7,000 to 448,250, while continuing claims dropped a scant 18,000 to 4.6 million.
Continuing claims are over 2 million below the peak set last year, though the steep drop is unlikely the result of increases in employment but mostly do to unemployed workers losing standard benefits, which normally run six months.
Before we go setting of any alarms bells over the unexpectedly-large rise in weekly claims, let’s look at an explanation offered up by Bloomberg News:
The Labor Department said claims piled up due to short holiday staffing at state processing centers. Market News International is quoting a Labor Department analyst as saying the week's gain is "not economic, but administrative."
Starting with the next report, the government analyst expects the effect to reverse making for a steady decline in coming weeks. An implication here is that short-staffing this year was greater than prior years and is not offset by seasonal adjustments. Note also that data from an unusually large number of seven states had to be estimated for the current report.
Seasonal adjustments can be difficult during part of the year for this volatile report. The Labor Department’s reasoning is plausible, and the rise should not be cause for concern.