Initial jobless claims for last week were reported at 298,000 this morning, a jump of over 50,000 from recent levels.
As most people probably already know, this huge jump had everything to do with Hurricane Harvey shutting down southeastern Texas, including the entire 7 million Houston metro area. Undoubtedly, the effect will last for weeks.
Fortunately, if we want to know what jobless claims would be ex-Harvey, there is a way to figure that out. Although I haven’t felt the need to dwell on weekly claims for several years now, I’ll start to calculate this again next week.
I did this before, in 2012, after Superstorm Sandy. Here’s how I described the process then:
I wanted to try to find out how much of this morning’s initial claims number was still due to Sandy. To do so, I checked the BLS breakdown of initial claims by states, which gives the unadjusted state-by-state initial claims numbers. I deducted NY and NJ, the two states most hit by Sandy, and compared the number as deducted with the unadjusted number minus NY and NJ this week one year ago. Since the seasonal adjustment should be almost identical, that should give me the “real” ex-Sandy initial claims number, assuming NY and NJ would, ex-Sandy, have layoffs at a similar rate to all the other states.
To do the same thing for Harvey, I’ll simply calculate the number for all states except Texas. Because the state by state data is reported with a one week delay, that won’t be until next week.
Of course, I might have to account for Irma and maybe even Jose in the next few weeks as well. But, one bridge at a time . . . .