January 16, 2016 Initial Unemployment Claims Rolling Average Again Worsens

Weekly Initial Unemployment Claims

The market (from Bloomberg) was expecting the weekly initial unemployment claims at 267 K to 285 K (consensus 275,000) vs the 293,000 reported. 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 278.500 (reported last week as 278.750) to 285,000. The rolling averages generally have been equal to or under 300,000 since August 2014.

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 4.4 % lower (degradation from the 4.8 % for last week) than they were in this same week in 2015.

Weekly Initial Unemployment Claims – 4 Week Average – Seasonally Adjusted – 2011 (red line), 2012 (green line), 2013 (blue line), 2014 (orange line). 2015 (violet line), 2016 (light blue)

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 January 16, the advance figure for seasonally adjusted initial claims was 293,000, an increase of 10,000 from the previous week’s revised level. The previous week’s level was revised down by 1,000 from 284,000 to 283,000. The 4-week moving average was 285,000, an increase of 6,500 from the previous week’s revised average. The previous week’s average was revised down by 250 from 278,750 to 278,500. There were no special factors impacting this week’s initial claims.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending January 9, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 9 was 2,208,000, a decrease of 56,000 from the previous week’s revised level. The previous week’s level was revised up 1,000 from 2,263,000 to 2,264,000. The 4-week moving average was 2,227,750, an increase of 3,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 2,224,250 to 2,224,500.