Watch Potential Seasonal Adjustment Boost In Jobless Claims Data

A much higher-than-expected number in today's weekly jobless claims data (vs +200k survey, +198k prior - release at 0830ET/1330UK) could spur a dovish market move, judging from reactions this week to poor 2nd tier employment data.

• But the initial read could be misleading (and indeed might not even reflect an underlying change in the labor dynamic at all): today's numbers will include new seasonal factors and revisions to prior data as part of the BLS's annual revisions.
• The general expectation for those who are watching this closely is that it could lead to a much higher claims number than expected. Goldman Sachs analysts for example see the seasonal factor distortions as having suppressed claims numbers by 45k since the start of the year, and could be "corrected" by that magnitude in today's release.
• As we noted post-claims last week, the raw non-seasonally adjusted data have started to drift higher in the past few weeks, compared to weeks of more typical non-pandemic years, while the seas adj data are potentially pushed lower with increased crossover of weeks with very high pandemic readings plus possible weather distortions.
• It's not a wide divergence yet, but with myriad indicators pointing to higher claims in the near future (Challenger layoffs, WARN notices), it bears watching today.