The week’s first meaningful data is jobless claims. These have been trending higher YoY, but with lots of seasonal noise. And that trend continued this week.

Initial claims increased 6,000 to 223,000. The four week moving average (especially more important right now to filter out seasonal noise) increased 750 to 213,500. With the typical one week lag, continuing claims increased 46,000 to 1.899 million:

Th unresolved seasonality in the adjustments for the past couple of years really stands out right now, as we see claims rising from year end lows towards summer peaks, and then back to year end lows in both of the last two years.

Also because of seasonality (in this case having to do with the week in which MLK day is observed), YoY comparisons have added importance, in addition to their being the basis for forecasting. So measured, initial claims were up 0.9%, the four week average up 5.3%, and continuing claims up 3.8%:

This continued the nearly 5 month string of higher YoY comparisons. But since we don’t even get to yellow flag territory until the comparisons hit 10%, these continue to qualify as neutral readings, consistent with a tepid but growing economy.

Finally, let’s take a look at what this might mean for the unemployment rate when January’s jobs report comes out:

Note that I’ve changed this format slightly this week, by including the total of initial + continuing claims in gold, since the unemployment rolls include people looking for work on both new and continuing basis. Also the unemployment rate data is rendered as the % change in a %. Since in the months around one year ago the unemployment rate averaged 3.8%, this suggests that it ought to be tending towards a 5% increase in that, i.e., 2.8 * 1.05 = 4.0% approximately. In December the unemployment rate was 4.1%, so this suggests it should tend slightly lower, leaving aside any continuing upward pressure from new immigrants seeking employment.

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