January 2018 Initial Unemployment Claims Rolling Average Marginally Worsens And Last Weeks Average Was Revised Upward

The market expectations for weekly initial unemployment claims (from Econoday) were 215 K to 225 K (consensus 222,000), 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 219,250 (reported last week as 218,750) to 221,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 196 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 11.6 % lower (better than the 9.3 % 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 January 5, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 17,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 231,000 to 233,000. The 4-week moving average was 221,750, an increase of 2,500 from the previous week's revised average. The previous week's average was revised up by 500 from 218,750 to 219,250.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending December 29, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 29 was 1,722,000, a decrease of 28,000 from the previous week's revised level. The previous week's level was revised up 10,000 from 1,740,000 to 1,750,000. The 4-week moving average was 1,721,250, an increase of 15,250 from the previous week's revised average. The previous week's average was revised up by 2,500 from 1,703,500 to 1,706,000.

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