November 2017 Initial Unemployment Claims Rolling Average Again Worsens

Hurricanes continue to impact claims taking procedures in the Virgin Islands, but Puerto Rico improved. The market expectations for weekly initial unemployment claims (from Bloomberg/Econoday) were 238 K to 240 K (consensus 240,000), and the Department of Labor reported -239,000 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 238,500 (reported last week as 237,750) to 239,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 139 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 3.9 % lower (worse than the 5.4 % 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 November 18, the advance figure for seasonally adjusted initial claims was 239,000, a decrease of 13,000 from the previous week’s revised level. The previous week’s level was revised up by 3,000 from 249,000 to 252,000. The 4-week moving average was 239,750, an increase of 1,250 from the previous week’s revised average. The previous week’s average was revised up by 750 from 237,750 to 238,500. Claims taking procedures continue to be disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 11, an increase of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 11 was 1,904,000, an increase of 36,000 from the previous week’s revised level. The previous week’s level was revised up 8,000 from 1,860,000 to 1,868,000. The 4-week moving average was 1,890,000, an increase of 1,000 from the previous week’s revised average. The previous week’s average was revised up by 2,000 from 1,887,000 to 1,889,000.