February 2020 Initial Unemployment Claims 4 Week Average Again Worsens

Market expectations for weekly initial unemployment claims (from Econoday) were 212 K to 226 K (consensus 215,000), and the Department of Labor reported 216,000 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 209,750 (reported last week as 209,750) to 213,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 254 consecutive weeks of initial claims below 300,000, the longest streak since 1970. The general trend of the 4-week rolling average is a slowing rate of improvement year-over-year which history suggests a slowing economy.

It should be pointed out that Econintersect watches the year-over-year change in the 4-week moving average. There is always some seasonality that migrates into the seasonally adjusted data, and year-over-year comparisons help remove some seasonality. The four-week rolling average of initial claims is +3.8 % (versus the +6.6 % last week) than they were in this same week a year ago.

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 29, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 3,000 from the previous week's unrevised level of 219,000. The 4-week moving average was 213,000, an increase of 3,250 from the previous week's unrevised average of 209,750.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending February 22, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 22 was 1,729,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 1,724,000 to 1,722,000. The 4-week moving average was 1,721,250, a decrease of 7,500 from the previous week's revised average. The previous week's average was revised down by 500 from 1,729,250 to 1,728,750.