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August Unemployment Claims

Unemployment Claims

Unemployment Claims are up in August. Don’t know if this is an indicator of things to come or changes in how it is reported.

Driving the news: The Labor Department said that 262,000 people filed new jobless claims last week, the highest since January and up from a low of 166,000 in April. The four-week moving average and number of ongoing jobless claims also rose.

But the layoff situation may not have worsened as much as those numbers imply, according to Goldman economist Ronnie Walker.

The government changed its process for seasonal adjustment in April, which Walker argues has exaggerated this summer’s reported claims numbers and accounts for about half the rise.

Walker also finds that a disproportionate share of the claims are coming from Massachusetts and Connecticut, and sees evidence of fraud in the latter, which is exaggerating the numbers.

What they’re saying: “After adjusting for these two distortions, initial claims appear to have been much more stable this year,” Walker wrote in a note. He suggested this “signal is corroborated by other measures of layoffs,” such as publicly announced cuts, and layoffs reported in the Job Openings and Labor Turnover survey.

Axios Macro By Neil Irwin and Courtenay Brown · Aug 11, 2022