The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 235 K to 245 K (consensus 239,000), and the Department of Labor reported 248,000 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 235,500 (reported last week as 235,250) to 238,000. 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 improved this week. This marks 115 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 13.4 % lower (better than the revised 14.9 % 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 27, the advance figure for seasonally adjusted initial claims was 248,000, an increase of 13,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 234,000 to 235,000. The 4-week moving average was 238,000, an increase of 2,500 from the previous week’s revised average. The previous week’s average was revised up by 250 from 235,250 to 235,500.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending May 20, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 20 was 1,915,000, a decrease of 9,000 from the previous week’s revised level. The previous week’s level was revised up 1,000 from 1,923,000 to 1,924,000. The 4-week moving average was 1,914,500, a decrease of 16,000 from the previous week’s revised average. This is the lowest level for this average since January 12, 1974 when it was 1,881,000. The previous week’s average was revised up by 250 from 1,930,250 to 1,930,500.
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