January 2020 Initial Unemployment Claims 4 Week Average Improves

Market expectations for weekly initial unemployment claims (from Econoday) were 213 K to 222 K (consensus 219,000), 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 233,500 (reported last week as 233,250) to 224,000. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 246 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 history suggests a slowing economy.

It should be pointed out that Econintersect watches the year-over-year change in the 4-week moving average. There is always some seasonality that migrates into the seasonally adjusted data, and year-over-year comparisons help remove some seasonality. The four-week rolling average of initial claims is +1.9 % (much better than the -5.2 % 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 4, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 9,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 222,000 to 223,000. The 4-week moving average was 224,000, a decrease of 9,500 from the previous week's revised average. The previous week's average was revised up by 250 from 233,250 to 233,500.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending December 28, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 28 was 1,803,000, an increase of 75,000 from the previous week's unrevised level of 1,728,000. The 4-week moving average was 1,744,750, an increase of 33,000 from the previous week's unrevised average of 1,711,750.

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