In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims for the week of October 13.
Initial claims for unemployment insurance spiked up by 46,000 claims to hit 388,000 claims for the week of October 13, after a huge drop in the previous week. But don’t read too much into the week’s headline number, as initial claims data is highly volatile. A better indicator of the general trend is the four-week moving average, which has volatility smoothed out. Using this measure, initial claims are at 365,500, just slightly up from last week’s 364,650 but significantly lower than in the same period of last year when the figure was about 400,000.
In related news, the drop in the September unemployment rate to 7.8 percent was met with some skepticism. Yet this should not be too surprising considering that initial claims for unemployment insurance have generally been on the downtrend from a peak of 600,000 claims a month in 2009 to about 370,000 today. So the fall in the initial claims data, if it can occur on a consistent basis, should correlate well with the fall in the unemployment rate.