Fed Chair Powell’s testimony on Capitol Hill yesterday made frequent mentions of the strength of the labor market, and initial jobless claims data released this morning helped to give further support of this strength. Claims were expected to come in unchanged from last week at 221K but instead fell to a seasonally adjusted level of 209K. That is the lowest print in about three months (since April 12th) when claims came in at the multi-decade low of 193K. Whereas the past few weeks were near the upper end of the past year’s range, this drop now brings claims back down towards the lower end of that range. In other words, while not a new low, it is still a healthy number. As such, the record streaks at or below 250K and 300K continue at 92 weeks and 227 weeks, respectively.

The four-week moving average helps to sift out some of the fluctuations of the high-frequency weekly data. This week saw the moving average fall from 222.5K down to 219.25K. Unlike the weekly number, there were actually several lower prints throughout the past couple of months, so this does not bring the indicator back towards the lower end of its range. In fact, this decrease only brings things back to where they stood about one month ago.

As could be expected given seasonal patterns, on a non-seasonally adjusted basis, claims rose to 232.7K after falling to 224.5K last week. Typically, the current week of the year sees a sizeable increase in claims averaging a week-over-week rise of over 42K over the past fifteen years, but this week’s change was much smaller with only an 8.2K increase. This week’s NSA number was also lower than the comparable week in 2018 when NSA claims were 264.9K.  Additionally, this was the lowest reading in claims for the current week of the year of the current cycle and it was substantially under the average for the past couple of decades of 371.69K.    Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

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