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19 Apr 2013
Forex Flash: Good Friday distortion could persist in US claims data - Nomura
FXstreet.com (Barcelona) - Nomura economists believe that a Good Friday distortion could persist in US claims data.
They note that the recent pattern of results show that initial jobless claims increased in the week that includes Good Friday, only to reverse three weeks later and in the past three years, initial claims increased,on average, 20k in the week including Good Friday and declined, on average, 21k three weeks later. Additionally, in the week ending 29 March, initial jobless claims increased by 31k from the prior week. If history is any indication of the future, they feel that we should see a drop in claims for the week ending in 20 April. Further, they add that Initial claims data can be quite sensitive to transitory shocks such as temporary factory shutdowns and weather related employment displacement. Thus, they feel that looking at the initial claims data on a week to week basis can lead to incorrect conclusions about the secular trend. However, by analysing the 4-week moving average can give a clearer picture of the secular trend in the labor market. They finish by writing, “For example, the auto plant shutdown in April 2011 and Hurricane Sandy in October 2012 caused initial claims to spike. However, the 4-week moving average dampened these distortions, helping to preserve the trend.”
They note that the recent pattern of results show that initial jobless claims increased in the week that includes Good Friday, only to reverse three weeks later and in the past three years, initial claims increased,on average, 20k in the week including Good Friday and declined, on average, 21k three weeks later. Additionally, in the week ending 29 March, initial jobless claims increased by 31k from the prior week. If history is any indication of the future, they feel that we should see a drop in claims for the week ending in 20 April. Further, they add that Initial claims data can be quite sensitive to transitory shocks such as temporary factory shutdowns and weather related employment displacement. Thus, they feel that looking at the initial claims data on a week to week basis can lead to incorrect conclusions about the secular trend. However, by analysing the 4-week moving average can give a clearer picture of the secular trend in the labor market. They finish by writing, “For example, the auto plant shutdown in April 2011 and Hurricane Sandy in October 2012 caused initial claims to spike. However, the 4-week moving average dampened these distortions, helping to preserve the trend.”