July 2016 Initial Unemployment Claims: Rolling Averages Improve

Weekly Initial Unemployment Claims

The market expectations for weekly initial unemployment claims (from Bloomberg) were 255,000 to 271,000 (consensus 269,000), and the Department of Labor reported 254,000 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 267,250 (reported last week as 266,750) to 264,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

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 4.9 % lower (improved from the 3.0 % for last week) than they were in this same week in 2015.

Weekly Initial Unemployment Claims - 4 Week Average - Seasonally Adjusted - 2011 (red line), 2012 (green line), 2013 (blue line), 2014 (orange line). 2015 (violet line), 2016 (light blue)

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 July 2, the advance figure for seasonally adjusted initial claims was 254,000, a decrease of 16,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 268,000 to 270,000. The 4-week moving average was 264,750, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 500 from 266,750 to 267,250. There were no special factors impacting this week's initial claims. This marks 70 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending June 25, unchanged from the previous week's revised rate. The previous week's rate was revised up by 0.1 from 1.5 to 1.6 percent. The advance number for seasonally adjusted insured unemployment during the week ending June 25 was 2,124,000, a decrease of 44,000 from the previous week's revised level. The previous week's level was revised up 48,000 from 2,120,000 to 2,168,000. The 4-week moving average was 2,148,250, an increase of 3,000 from the previous week's revised average. The previous week's average was revised up by 11,750 from 2,133,500 to 2,145,250.