The market expectations for weekly initial unemployment claims (from Bloomberg/Econoday) were 235 K to 243 K (consensus 240,000), and the Department of Labor reported 244,000 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 244,000 (reported last week as 243,750) to 244,000 . The rolling averages generally have been equal to or under 300,000 since August 2014.
Analyst Opinion of Initial Unemployment Claims
The trend of the 4 week moving average was unchanged this week. This marks 123 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 5.6 % lower (worse than the 6.0 % for last week) than they were in this same week in 2016.
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 July 22, the advance figure for seasonally adjusted initial claims was 244,000, an increase of 10,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 233,000 to 234,000. The 4-week moving average was 244,000, unchanged from the previous week’s revised average. The previous week’s average was revised up by 250 from 243,750 to 244,000.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending July 15, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 15 was 1,964,000, a decrease of 13,000 from the previous week’s unrevised level of 1,977,000. The 4- week moving average was 1,963,750, an increase of 4,750 from the previous week’s unrevised average of 1,959,000.
