Hurricanes Harvey and Irma impacted this week’s claims. The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 260 K to 300 K (consensus 270,000), and the Department of Labor reported 272,000 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 268,750 (reported last week as 268,750) to 277,750. The rolling averages generally have been equal to or under 300,000 since August 2014.
Analyst Opinion of Initial Unemployment Claims
This marks 132 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 8.9 % higher (far worse than the 4.7 % higher 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 September 23, the advance figure for seasonally adjusted initial claims was 272,000, an increase of 12,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 259,000 to 260,000. The 4-week moving average was 277,750, an increase of 9,000 from the previous week’s unrevised average of 268,750. This is the highest level for this average since February 6, 2016 when it was 277,750. Hurricanes Harvey and Irma impacted this week’s claims.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending September 16, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 16 was 1,934,000, a decrease of 45,000 from the previous week’s revised level. The previous week’s level was revised down by 1,000 from 1,980,000 to 1,979,000. The 4-week moving average was 1,949,750, a decrease of 2,750 from the previous week’s revised average. The previous week’s average was revised down by 500 from 1,953,000 to 1,952,500.
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