February 2017 Initial Unemployment Claims Rolling Average Improves

The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 245 K to 250 K (consensus 250,000), and the Department of Labor reported 234,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 248,000 (reported last week as 248,000) to 244,250. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

The trend of the 4 week moving average insignificantly worsened this week. This marks 100 consecutive weeks of initial claims below 300,000, the longest streak since 1970. This is the lowest level for this average since November 3, 1973 when it was 244,000. The general trend of the 4 week rolling average is a slowing rate of improvement year-over-year which historically suggests a slowing economy.

 

It should be pointed out that Econintersect watches the year-over-year change on the 4 week moving average. There is always some seasonality which migrates into the seasonally adjusted data, and year-over-year comparisons helps remove some seasonality. The four week rolling average of initial claims are 12.1 % lower (slightly worse than the revised 12.4 % for last week) than they were in this same week in 2016.

 

Claim levels are at 40 year lows (with the normal range around 350,000 weekly initial unemployment claims of levels seen historically during times of economic expansion - see chart below).

 

From the Department of Labor:

In the week ending February 4, the advance figure for seasonally adjusted initial claims was 234,000, a decrease of 12,000 from the previous week's unrevised level of 246,000. The 4-week moving average was 244,250, a decrease of 3,750 from the previous week's unrevised average of 248,000. This is the lowest level for this average since November 3, 1973 when it was 244,000.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending January 28, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 28 was 2,078,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 2,064,000 to 2,063,000. The 4-week moving average was 2,075,750, a decrease of 3,750 from the previous week's revised average. The previous week's average was revised down by 250 from 2,079,750 to 2,079,500.