December 2018 Initial Unemployment Claims Rolling Average Again Improved

The market expectations for weekly initial unemployment claims (from Econoday) were 212 K to 226 K (consensus 221,000), and the Department of Labor reported 214,000 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 224,750 (reported last week as 224,750) to 222,000. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 193 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 5.9 % lower (better than the 4.3 % lower 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 December 15, the advance figure for seasonally adjusted initial claims was 214,000, an increase of 8,000 from the previous week's unrevised level of 206,000. The 4-week moving average was 222,000, a decrease of 2,750 from the previous week's unrevised average of 224,750.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending December 8, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 8 was 1,688,000, an increase of 27,000 from the previous week's unrevised level of 1,661,000. The 4-week moving average was 1,672,500, an increase of 6,750 from the previous week's unrevised average of 1,665,750.

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