The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 239 K to 245 K (consensus 240,000), and the Department of Labor reported 232,000 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 243,500 (reported last week as 243,500) to 240,750. 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 improved this week. This marks 113 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 12.5 % lower (better than the 9.8 % 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 May 13, the advance figure for seasonally adjusted initial claims was 232,000, a decrease of 4,000 from the previous week’s unrevised level of 236,000. The 4-week moving average was 240,750, a decrease of 2,750 from the previous week’s unrevised average of 243,500.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending May 6, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 6 was 1,898,000, a decrease of 22,000 from the previous week’s revised level. This is the lowest level for insured unemployment since November 5, 1988 when it was 1,898,000. The previous week’s level was revised up 2,000 from 1,918,000 to 1,920,000. The 4-week moving average was 1,946,000, a decrease of 20,000 from the previous week’s revised average. This is the lowest level for this average since January 19, 1974 when it was 1,920,750. The previous week’s average was revised up by 500 from 1,965,500 to 1,966,000.