Market expectations for weekly initial unemployment claims (from Econoday) were 218 K to 219 K (consensus 218,000), and the Department of Labor reported 281,000 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 215,750 (reported last week as 214,000) to 232,250. The rolling averages generally have been equal to or under 300,000 since August 2014.
Analyst Opinion of Initial Unemployment Claims
According to the BLS:
During the week ending March 14, the increase in initial claims are clearly attributable to impacts from the COVID-19 virus. A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not.
Also note:
This week’s release reflects the annual revision to the weekly unemployment claims seasonal adjustment factors. The seasonal adjustment factors used for the UI Weekly Claims data from 2015 forward, along with the resulting seasonally adjusted values for initial claims and continuing claims, have been revised.
This marks 256 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 history suggests a slowing economy.
It should be pointed out that Econintersect watches the year-over-year change in the 4-week moving average. There is always some seasonality that migrates into the seasonally adjusted data, and year-over-year comparisons help remove some seasonality. The four-week rolling average of initial claims is 5.3 % higher than one year ago (versus the 2.6 % lower last week)
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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 March 14, the advance figure for seasonally adjusted initial claims was 281,000, an increase of 70,000 from the previous week’s unrevised level of 211,000. This is the highest level for initial claims since September 2, 2017 when it was 299,000. The 4-week moving average was 232,250, an increase of 16,500 from the previous week’s revised average. This is the highest level for this average since January 27, 2018 when it was 234,500. The previous week’s average was revised up by 1,750 from 214,000 to 215,750.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending March 7, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 7 was 1,701,000, an increase of 2,000 from the previous week’s revised level. The previous week’s level was revised down by 23,000 from 1,722,000 to 1,699,000. The 4-week moving average was 1,703,250, a decrease of 7,000 from the previous week’s revised average. The previous week’s average was revised down by 17,250 from 1,727,500 to 1,710,250.
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