Jobless Claims Will Be Much Lower On Seasonal Adjustment Change

Today's weekly jobless claims release, due at 8:30 ET, will reflect a new seasonal adjustment procedure, resulting in a significantly lower level of initial claims than in weeks prior.

• The average level of initial claims in regular state programs would have been nearly 200,000 lower than reported if the new adjustment had been put in place over the past four weeks, according to Wrightson ICAP. The average continuing claims level would have been about 400,000 lower.
• Adjustments to national initial and continuing claims will reflect additive factors, which are preferred in times of relative economic instability, rather than multiplicative factors, which have boosted levels of initial claims during the Covid-19 pandemic.
• Multiplicative seasonal adjustment factors bumped up the level of initial claims by 22% in the week ending August 22, according to Wrightson ICAP, and would have upped the claims level by 34% in the week ending September 12, which contains the Labor Day holiday.
• Markets expect initial jobless claims to fall to 950,000 through August 29. Continuing claims should dip to 14 million through August 22.