Initial Jobless Claims Up Again

Initial Jobless Claims came in 4K above expectations at 229K on a seasonally adjusted basis; up from last week’s 223K. This is near the upper end of the range jobless claims have been in for the past few months. It has also now been two months since claims last hit a new low of 200K. On the other hand, this week marks the 210th week that claims have come in below 300K. So while perhaps the strength of the labor market could be taking a breather, by all means, it still appears healthy by this measure.

For the third week in a row, the four-week moving average of the seasonally adjusted data has declined; falling to 223.75K from 226.25K last week. It has also now been three weeks since claims last hit a 52-week high. Though more 52-week highs are certainly not out of the realm of possibilities in the near future, this improvement seems to point to these highs from the beginning of February being more consistent with random spikes that have been observed in the past rather than a new trend. An additional note now looking back at February jobs data as a whole, with all of the data for the month in—namely last week’s abysmal Nonfarm Payrolls report showing only a gain of 20K—the labor market has seemed to calm down in the tail end of the month, and conditions seem to have improved slightly from the rough first couple of weeks in February.

On a non-seasonally, adjusted basis claims fell this week consistent with seasonal tendencies. Declining 11.8K to 208.8K this week, the non-seasonally adjusted number came in far below the average of 325.9K for the current week of the year since 2000. Also while it is near cycle lows, the same week last year actually saw a lower number of 204.9K. Since the start of the year, there already has been five times that the non-seasonally adjusted claims number has come in worse than the prior year. That compares to only twice that it had happened in 2018 and seven times in 2017. So while still very healthy, going forward labor markets are certainly showing signs of losing momentum.

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