Today’s unemployment news suggested an improvement in initial jobless claims, but Deutsche Bank wouldn’t get too excited just yet.
They think that this is seasonal issues, like shut downs of auto plants and temporary workers, impacting the numbers.
From Deutsche Bank (emphasis theirs):
Temporarily laid-off workers file for unemployment benefits during this period, thereby causing a spike in applications. Seasonal adjustment factors attempt to account for this, but since the schedules change every year, the claims data are prone to large week-to-week volatility. GM recently reported that they were not shutting as many assembly plants as usual due to demand for various models, so as a result the “usual” seasonal factors may be over-compensating and driving initial jobless claims artificially lower.
So it seems as if the established means for adjusting unemployment data for July may be incorrect, thus making the situation look better right now than it actually is.