February 2019 Initial Unemployment Claims Rolling Average Remains Highest Since January 2018

Market expectations for weekly initial unemployment claims (from Econoday) was 220 K to 225 K (consensus 225,000), and the Department of Labor reported 216,000 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 231,750 (reported last week as 231,750) to 235,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 202 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 4.6 % higher (worse than the 1.5 % 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 February 16, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 23,000 from the previous week's unrevised level of 239,000. The 4-week moving average was 235,750, an increase of 4,000 from the previous week's unrevised average of 231,750. This is the highest level for this average since January 20, 2018 when it was 237,500.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending February 9, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 9 was 1,725,000, a decrease of 55,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 1,773,000 to 1,780,000. The 4-week moving average was 1,754,750, an increase of 2,750 from the previous week's revised average. The previous week's average was revised up by 1,750 from 1,750,250 to 1,752,000.

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