If there has been one steady pillar of the economy over the last several years, it has been jobless claims. Outside of a brief period late last year and early in 2016, where claims started to drift higher, the trend has been solidly lower. This morning’s weekly report was no exception. While economists were expecting first-time claims to come in at a level of 275K, the actual reading came in at 259K. That reading is notable for multiple reasons. First, there hasn’t been a lower weekly reading all year. Second, it represents the third lowest weekly reading of the entire economic cycle, and third, as shown in the chart below, claims are now comfortably below that uptrend line formed from the October low of 256K. Pretty impressive to say the least.
On a four-week moving average basis, jobless claims also dropped this week falling from 270K down to 267.5K. That’s the lowest level since late October, and is now within 9K of the cycle low of 259.25K reached back on 10/23/15. Next week, we will be dropping a low reading from the count (262K), so it is going to be hard for the four-week moving average at least to maintain its downward momentum.
On a non-seasonally adjusted basis (NSA) jobless claims were just as impressive. As shown in the chart below, this week’s reading came in at 248K, which is nearly 120K below the average for this time of year since 2000. Also, to find a week where NSA claims were lower at this time of year, you have to go all the way back to 1973. That’s more than 40 years ago!