July 2017 Initial Unemployment Claims Rolling Average Marginally Improves

The market expectations for weekly initial unemployment claims (from Bloomberg/Econoday) were 240 K to 250 K (consensus 245,000), and the Department of Labor reported 233,000 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 246,000 (reported last week as 245,750) to 243,750. 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 worsened this week. This marks 122 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 6.1 % lower (better than the 5.7% 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 July 15, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 15,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 247,000 to 248,000. The 4-week moving average was 243,750, a decrease of 2,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 245,750 to 246,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending July 8, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 8 was 1,977,000, an increase of 28,000 from the previous week’s revised level. The previous week’s level was revised up 4,000 from 1,945,000 to 1,949,000. The 4-week moving average was 1,959,000, an increase of 8,750 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 1,949,250 to 1,950,250.