11 January 2020 Initial Unemployment Claims 4 Week Average Again Improves

Market expectations for weekly initial unemployment claims (from Econoday) were 210 K to 220 K (consensus 214,000), and the Department of Labor reported 204,000 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 224,000 (reported last week as 224,000) to 216,250. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 247 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 +3.0 % (much better than the -0.1 % 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 January 11, the advance figure for seasonally adjusted initial claims was 204,000, a decrease of 10,000 from the previous week's unrevised level of 214,000. The 4-week moving average was 216,250, a decrease of 7,750 from the previous week's unrevised average of 224,000.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending January 4, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 4 was 1,767,000, a decrease of 37,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 1,803,000 to 1,804,000. The 4-week moving average was 1,755,500, an increase of 10,500 from the previous week's revised average. The previous week's average was revised up by 250 from 1,744,750 to 1,745,000.

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Wall St. Wolf 1 month ago Member's comment

Good read.

Steven Hansen 1 month ago Author's comment

thank you Wall St Wolf