The 405 Club

If we use my rule that three weeks makes a trend, then the trend in new unemployment claims is something to worry about. This week’s Unemployment Insurance Weekly Claims Report was another disappointment, marking three weeks of unwelcome increases. New claims came in at 500k, the worst since the November 14th reading, when the bad numbers were falling. Last week was revised up 4k. This was outside of the Bloomberg consensus range of 465k to 495k. From the report:

In the week ending Aug. 14, the advance figure for seasonally adjusted initial claims was 500,000, an increase of 12,000 from the previous week’s revised figure of 488,000. The 4-week moving average was 482,500, an increase of 8,000 from the previous week’s revised average of 474,500.

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Ouch. Most people had hoped that last week’s rise in new unemployment claims would prove to be a short spike. That turned out not to be the case when the number continued to rise. This week’s Unemployment Insurance Weekly Claims Report disappointed nearly everyone with new claims coming in at 484k. This is the worst number in about 5 months. Last week’s bad number was revised up 3k. This was outside of the Bloomberg consensus range of 460k to 470k. From the report:

In the week ending Aug. 7, the advance figure for seasonally adjusted initial claims was 484,000, an increase of 2,000 from the previous week’s revised figure of 482,000. The 4-week moving average was 473,500, an increase of 14,250 from the previous week’s revised average of 459,250.

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This week’s Unemployment Insurance Weekly Claims Report did not give us the three-in-a-row we were looking for. New claims grew to 464k. Last week’s number was actually revised down 2k, which may be the best news in the report. The new claims number fell into the middle of the Bloomberg consensus range of 430k to 490k. From the report:

In the week ending July 17, the advance figure for seasonally adjusted initial claims was 464,000, an increase of 37,000 from the previous week’s revised figure of 427,000. The 4-week moving average was 456,000, an increase of 1,250 from the previous week’s revised average of 454,750.

The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending July 10, a decrease of 0.2 percentage point from the prior week’s unrevised rate of 3.7 percent.

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This week’s Unemployment Insurance Weekly Claims Report is similar to last week’s. New claims fell fast on an adjusted basis, but grew fast on an unadjusted basis. There is one critical difference: the adjusted number of new claims has hit a new low since the peak. That’s right, actual progress for the first time in months. The new claims number dropped to 429k while last week’s number was revised up 4k. New claims were at the low end of the Bloomberg consensus range of 420k to 460k, though this is widely being reported as a solid trouncing of expectations (another similarity to last week). From the report:

In the week ending July 10, the advance figure for seasonally adjusted initial claims was 429,000, a decrease of 29,000 from the previous week’s revised figure of 458,000. The 4-week moving average was 455,250, a decrease of 11,750 from the previous week’s revised average of 467,000.

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