November 2016 Initial Unemployment Claims: Lowest Level Since November 24, 1973

Weekly Initial Unemployment Claims

The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 255 K to 262 K (consensus 257,000), and the Department of Labor reported 235,000 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 260,000 (reported last week as 259,750) to 253,500. 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 significantly improved this week. This marks 89 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 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 7.3 % lower (improvement from the 4.2 % 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 November 12, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 19,000 from the previous week's unrevised level of 254,000. This is the lowest level for initial claims since November 24, 1973 when it was 233,000. The 4-week moving average was 253,500, a decrease of 6,500 from the previous week's revised average. The previous week's average was revised up by 250 from 259,750 to 260,000. There were no special factors impacting this week's initial claims. This marks 89 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 5, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 5 was 1,977,000, a decrease of 66,000 from the previous week's revised level. This is the lowest level for insured unemployment since April 15, 2000 when it was 1,962,000. The previous week's level was revised up 2,000 from 2,041,000 to 2,043,000. The 4-week moving average was 2,022,500, a decrease of 19,250 from the previous week's revised average. This is the lowest level for this average since June 17, 2000 when it was 2,016,750. The previous week's average was revised up by 2,250 from 2,039,500 to 2,041,750.