Thursday’s report of weekly jobless claims showed an unexpected decline as first-time claims fell from 262K down to 255K versus consensus expectations for an increase to 270K. This week’s reading matches the cycle low from 7/17/15 and also matches the lowest level since 1973. We have said many times in the last several months that it was hard to imagine jobless claims falling further from their current levels, but each time we said this they have defied expectations and fallen further.
This week’s decline also brought the four-week moving average down to 265K, which also represents a new cycle low. The last time we saw a lower reading in the four-week moving average was in December 1973.
On a non-seasonally adjusted (NSA) basis, jobless claims rose from 227.2K up to 255.1K. This was the largest weekly increase in the NSA weekly reading since July, but before we start attributing all of the strength in the above numbers to seasonal adjustments, we would note that it is typical for claims to increase during the most recent week of the year. Going back to 2000, the average increase has been 39.3K, so the current week’s increase of 27.9K is actually below average. In terms of the level, this week’s NSA reading in jobless claims is more than 100K below the average of 369K since 2000.