Marc Pado Comments: The Good News In Today's Jobless Claims Report
January 13, 2012, TheStreet.com
The jump in NSA initial claims can easily be explained. Retailers and other employers that hired seasonal help have sent those temporary workers away now that the holiday season is over. And judging by today's disappointing U.S. retail sales data for December, retailers that hired the temporary help certainly don't need them on payroll.
But for all the concern that non-seasonally adjusted claims numbers were high during the first week of 2012, it is actually the lowest total investors have seen since 2008, as the chart below shows. During the first week of January 2008, non-seasonally adjusted claims were 548,000, and that was months before the financial crisis exploded and Lehman Brothers went bankrupt.
Paul Nolte, managing director with Dearborn Partners in Chicago, says he prefers the non-seasonally adjusted data because it's "less fuzzy" than the seasonally adjusted numbers. He's impressed that the trend overall is downward.
"If you look at the NSA, they're up but nowhere near where they had been in past Januaries," Nolte says. "You have a series of lower highs. When you look at it on a year-over-year basis with no adjustments, you get a better picture. And that picture is improving. It is at least a little better than what many are expecting."
In other words, while it's hard to stomach a rise in initial jobless claims, investors should be at least cheerful that the trends are pointing downward for now.
"Any time you get into the year-end and the first several weeks of the new year, there is more behind the number beyond the seasonal factors," Pado says. "You're better off not taking these numbers too seriously and instead focus on the overall trend, which is still down. That's the takeaway you should have out of these numbers in January."
So while there was some mild good news in an otherwise dark jobless claims number, Swonk still sounds the alarm for future miserable jobless claims numbers. "It's disturbing that there wasn't a lot of federal layoffs," she says. "They are looming out there and haven't yet hit."
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