Blue Line 4 Week Average

The market was expecting the weekly initial unemployment claims at 280,000 to 297,000 (consensus 290,000) vs the 294,000 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 290,750 (reported last week as 290,750) to 290,500. Rolling averages under 300,000 are excellent.

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 16.8% lower (slightly worse than the 19.0% reported last week) than they were in this same week in 2013 (see chart below).

2014 claim levels are near 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 3, the advance figure for seasonally adjusted initial claims was 294,000, a decrease of 4,000 from the previous week's unrevised level of 298,000. The 4-week moving average was 290,500, a decrease of 250 from the previous week's unrevised average of 290,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending December 27, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 27 was 2,452,000, an increase of 101,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 2,353,000 to 2,351,000. The 4-week moving average was 2,397,000, a decrease of 17,000 from the previous week's revised average. The previous week's average was revised down by 250 from 2,414,250 to 2,414,000.