Hurricanes Irma and Maria 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 235 K to 240 K (consensus 235,000), and the Department of Labor reported 229,000 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 239,750 (reported last week as 239,500) to 232,500. The rolling averages generally have been equal to or under 300,000 since August 2014.
Analyst Opinion of Initial Unemployment Claims
This marks 136 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 9.0 % lower (better than the 5.0 % 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 October 28, the advance figure for seasonally adjusted initial claims was 229,000, a decrease of 5,000 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 232,500, a decrease of 7,250 from the previous week’s revised average. This is the lowest level for this average since April 7, 1973 when it was 232,250. The previous week’s average was revised up by 250 from 239,500 to 239,750. Claims taking procedures continue to be severely disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico and they are now processing backlogged claims.
The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending October 21, a decrease of 0.1 percentage point from the previous week’s revised rate. The previous week’s rate was revised up by 0.1 from 1.3 to 1.4 percent. The advance number for seasonally adjusted insured unemployment during the week ending October 21 was 1,884,000, a decrease of 15,000 from the previous week’s revised level. This is the lowest level for insured unemployment since December 29, 1973 when it was 1,805,000. The previous week’s level was revised up 6,000 from 1,893,000 to 1,899,000. The 4-week moving average was 1,895,750, a decrease of 9,250 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 1,500 from 1,903,500 to 1,905,000.
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