Hurricanes continue to impact claims taking procedures in the Virgin Islands and Puerto Rico. The market expectations for weekly initial unemployment claims (from Bloomberg/Econoday) were 226 K to 240 K (consensus 230,000), and the Department of Labor reported 210,000 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 225,500 (reported last week as 226,000) to 220,500. The rolling averages generally have been equal to or under 300,000 since August 2014.
Analyst Opinion of Initial Unemployment Claims
This marks 151 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 8.0 % lower (worse than the 8.2 % lower 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 February 24, the advance figure for seasonally adjusted initial claims was 210,000, a decrease of 10,000 from the previous week’s revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The previous week’s level was revised down by 2,000 from 222,000 to 220,000. The 4-week moving average was 220,500, a decrease of 5,000 from the previous week’s revised average. This is the lowest level for this average since December 27, 1969 when it was 219,750. The previous week’s average was revised down by 500 from 226,000 to 225,500. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending February 17, an increase of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 17 was 1,931,000, an increase of 57,000 from the previous week’s revised level. The previous week’s level was revised down by 1,000 from 1,875,000 to 1,874,000. The 4-week moving average was 1,920,000, a decrease of 6,250 from the previous week’s revised average. The previous week’s average was revised down by 250 from 1,926,500 to 1,926,250.
