Jobless Claims in Perspective: Adjusted for Workforce Today's Claims Are Below 1992 Level

WASHINGTON (MarketWatch) -- "First-time filings for state unemployment benefits climbed to their highest level since mid-December last week, defying the forecasts of economists who had expected a sharp downturn, government data showed Thursday. For the week ended Jan. 30, initial claims rose 8,000 to stand at 480,000, according to the Labor Department. A closely watched barometer for U.S. employment, claims had spiked earlier in January. However, economists have thought that the increase would quickly be reversed.

The claims data may cause economists to become more pessimistic about the U.S. employment report for January -- pivotal for jobseekers, investors and Washington policy makers alike -- that will be released by the government on Friday morning. It is starting to look as though the downward trend in claims, which has been key to the story of payroll gains in the next few months, has stalled but we need more data to be sure," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Other economists said the backlog problem was centered in California and may be cleared up in coming weeks. This week, the government said only that there were no reports of unusual factors that might have influenced the data. The four-week moving average for initial claims, designed to smooth out fluctuations in the weekly data, rose to 468,750, up 11,750 (see chart above), the highest level since the week ended Dec. 5."

MP: Following 19 straight weekly declines, jobless claims (4-week moving average) have increased for the last three weeks and are at the highest level in eight weeks.

See Scott Grannis' post on why this recent "hiccup" doesn't mean anything. In his post Scott writes: "In fact, if you adjust claims for the size of the workforce (which is 21% larger today than it was then), today's level of claims is about 5% lower than than the average level of claims in the first half of 1992."