New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. Why Investors Care
| Released on 1/25/07 For wk 1/20 2007 | ||||||||||||
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Highlights
Initial jobless claims jumped 36,000 in the Jan. 20 week to a much higher than expected and disappointing level of 325,000. But the week included Martin Luther King Day Jr. Day which may have skewed the results. The four-week average is probably a more reliable reading, up 1,500 in the week and at a healthier level of 309,250.
Continuing claims for the Jan. 13 week fell 39,000 to 2.484 million. The Jan. 13 week is the survey week for the monthly employment report, and a comparison with the same week in December shows a slight improvement for continuing claims. Though the same comparison with initial claims shows a step backward, a comparison of four-week averages, at 307,750 vs. 326,000, is a plus.
Treasuries firmed slightly in what is likely to be the only reaction to the report.
Initial jobless claims in the January 13 week fell 8,000 to an 11-month low of 290,000 with the four-week average down 6,500 to a 3-month low of 308,000. While there can be significant seasonal adjustment problems during holiday weeks such as with the MLK holiday shortened week, that does not appear to be the case. The labor market is the key area of concern for the Fed and markets will continue to focus on measures of how tight conditions are.
Jobless Claims Consensus Forecast for 1/20/07: 310,000
Range: 285,000 to 330,000
![[Chart]](chart.gif)
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Weekly series fluctuate more dramatically than monthly series even when the series are adjusted for seasonal variation. The 4-week moving average gives a better perspective on the underlying trend. |
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