June 2019 Initial Unemployment Claims Moving Average Again Improved

Market expectations for weekly initial unemployment claims (from Econoday) were 212 K to 216 K (consensus 215,000), and the Department of Labor reported 218,000 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 217,500 (reported last week as 216,750) to 215,000. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 217 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. The unemployment rate is currently worse than one year ago.

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 help remove some seasonality. The four-week rolling average of initial claims is 3.3 % higher (better than the 1.1 % higher for 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 June 1, the advance figure for seasonally adjusted initial claims was 218,000, unchanged from the previous week's revised level. The previous week's level was revised up by 3,000 from 215,000 to 218,000. The 4-week moving average was 215,000, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 750 from 216,750 to 217,500.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending May 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 25 was 1,682,000, an increase of 20,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 1,657,000 to 1,662,000. The 4-week moving average was 1,672,750, a decrease of 1,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 1,672,500 to 1,673,750.