Friday, February 5, 2016

Initial claims, seasonal adjustment


In a large chart. Look the seasonal pattern is very reliable, and predictable. We can see winter, growing season, holidays; the whole thing.  

But look at 2008, the red line suddenly breaks the seasonal filter. So, look for an 'out  of the ordinary' change in the red line, ignore the blue'  Rather, look to see if we have the normal winter layoffs, and that red line should drop below the blue, if all is well.  

Consider the possibility that firms, households, economists and bootleggers all believed they just had a bad winter season.  They are fooled by the seasonal adjuster, and they all lay off more, simultaneously, not realizing we suffer a downturn.

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