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By New_Deal_democrat October 18, 2013 9:51 am
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"Real" initial jobless claims ex-California computer glitches show improvement

 by New Deal democrat

Computer issues in California have bedeviled the weekly initial jobless claims reports for the last six weeks.  We can make a good estimate the "real" initial jobless claims have been, however, by excluding California, comparing the unadjusted average for the other 49 states this year vs. last year in the same week, and projecting this year's "real" number by assuming that the percentage of claims in the other 49 states are the same percentage of the total this year as they were last year.  I used this technique last autumn in the wake of Superstorm Sandy to show that "real" initial jobless claims were actually declining slightly -- a trend that proved correct once the distortions disappeared from the data in a few weeks.

Since I didn't update this post in the last several weeks, this update will coner the last two weeks of September and the first week of October. Keep in mind that I am not adjusting this week's report, since there is a one week delay in the Department of Labor's posting of state by state numbers. 

Three weeks ago last year (September 21) total unadjusted jobless claims were 303685 vs. 255,110 this year.  Of last year's total, 47,894 were California claims vs. 36,903 this year.  This gives us a 49 state comparison of 255,791 last year vs. 218,207 this year.  That makes this year's 49 state number 85.3% of last year's 49 state number.

Last year, after seasonal adjustment, the report for September 21 was 367,000.  Multiplying that by 0.863 gives us just over 313,000.

Two weeks ago last year (September 28) total unadjusted jobless claims were 301,046 vs. 251,083 this year.  Of last year's total, 49,963 were California claims vs. 37,948 this year.  This gives us a 49 state comparison of 251,083 last year vs. 214,285 this year.  That makes this year's 49 state number 85.3% of last year's 49 state number.

Last year, after seasonal adjustment, the report for September 28 was 368,000.  Multiplying that by 0.853 gives us just over 314,000.

One week ago last year (October 5) the total unadjusted jobless claims were 329,925 vs. 336,139 this year.  Of last year's total, 46,984 were California claims vs. 71,602 this year.  This gives us a 49 state comparison of 282,941 last year vs. 264,537 this year.  That makes this year's 49 state number 93.5% of last year's 49 state number.

Last year, after seasonal adjustment, the report for October 5 was 352,000.  Multiplying that by 0.863 gives us just over 329,000.

I have previously estimated that the "real" initial claims number for the week of September 7 and September 14.

Here is what the reported initial claims numbers have been each week beginning with September 7 up until the present (first column), along with the "real" claims number adjusting for the California computer issue for each week through October 5 (second column):

Sep 07  294,000  318,000
Sep 14  311,000  327,000
Sep 21  307,000  313,000
Sep 28  308,000  314,000
Oct 05  373,000  329,000
Oct 12  358,000  -------

That means the "real" 4 week moving average for September 28 is 318,000.  The "real" 4 week moving average for October 5 is 320,750.  Note that October 5 was the first week that federal workers affected by the government shutdown applied for unemployment insurance.

Further, note that the entire seasonally adjusted shortfall based on California's computer glitches is estimated to  have been 53,000.  In the week ending October 5, seasonally adjusted, California made up about 37,000 of that shortfall.  Most likely next week we will find out that most if not all of the rest of the backlog has been entered into California's system, so the effects of the computer glitches will be over.

The bottom line is that, after we adjust for the California computer glitches, the trend in initial claims is still improving.

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