November 2018 Initial Unemployment Claims Rolling Average Marginally Improves

The market expectations for weekly initial unemployment claims (from Econoday) were 210 K to 214 K (consensus 213,000), and the Department of Labor reported 214,000 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 214,000 (reported last week as 213,750) to 213,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

Analyst Opinion of Initial Unemployment Claims

This marks 187 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 7.6 % lower (worse than the 8.0 % lower for last week) than they were in this same week a year ago.

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 3, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 1,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 214,000 to 215,000. The 4-week moving average was 213,750, a decrease of 250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 213,750 to 214,000.

The advance seasonally adjusted insured unemployment rate was 1.1 percent for the week ending October 27, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 27 was 1,623,000, a decrease of 8,000 from the previous week’s unrevised level of 1,631,000. This is the lowest level for insured unemployment since July 28, 1973 when it was 1,603,000. The 4-week moving average was 1,633,250, a decrease of 7,500 from the previous week’s unrevised average of 1,640,750. This is the lowest level for this average since August 11, 1973 when it was 1,627,250.


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