January 2021 Initial Unemployment Claims Rolling Average Again Worsens

Market expectations for weekly initial unemployment claims (from Econoday) were 868 K to 990 K (consensus 890 K), and the Department of Labor reported 900,000 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 824,500 (reported last week as 834,250) to 848,000

Analyst Opinion of Initial Unemployment Claims

Job's loss since the start of the pandemic is now 75,742,000. Many in this number are now employed or have dropped out of the workforce as all programs continuing claims number is 15,994,519 down from last week's 18,407,027

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 295 % higher than one year ago (versus the 289 % higher last week).

Claim levels before the coronavirus pandemic were 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 16, the advance figure for seasonally adjusted initial claims was 900,000, a decrease of 26,000 from the previous week's revised level. The previous week's level was revised down by 39,000 from 965,000 to 926,000. The 4-week moving average was 848,000, an increase of 23,500 from the previous week's revised average. The previous week's average was revised down by 9,750 from 834,250 to 824,500.

The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending January 9, unchanged from the previous week's revised rate. The previous week's rate was revised down by 0.1 from 3.7 to 3.6 percent. The advance number for seasonally adjusted insured unemployment during the week ending January 9 was 5,054,000, a decrease of 127,000 from the previous week's revised level. The previous week's level was revised down by 90,000 from 5,271,000 to 5,181,000. The 4-week moving average was 5,126,250, a decrease of 67,000 from the previous week's revised average. The previous week's average was revised down by 22,500 from 5,215,750 to 5,193,250.

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