January 2018 Initial Unemployment Claims At Highest Level Since September 2017

Market expectations for weekly initial unemployment claims (from Econoday) was 216 K to 225 K (consensus 220,000), and the Department of Labor reported 253,000 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 215,250 (reported last week as 215,000) to 220,250. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 199 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 6.1 % lower (worse than the 10.2 % 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 January 26, the advance figure for seasonally adjusted initial claims was 253,000, an increase of 53,000 from the previous week's revised level. This is the highest level for initial claims since September 30, 2017 when it was 254,000. The previous week's level was revised up by 1,000 from 199,000 to 200,000. The 4-week moving average was 220,250, an increase of 5,000 from the previous week's revised average. The previous week's average was revised up by 250 from 215,000 to 215,250.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending January 19, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 19 was 1,782,000, an increase of 69,000 from the previous week's unrevised level of 1,713,000. This is the highest level for insured unemployment since April 28, 2018 when it was 1,794,000. The 4-week moving average was 1,737,750, an increase of 8,000 from the previous week's unrevised average of 1,729,750. This is the highest level for this average since August 4, 2018 when it was 1,729,000.

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