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 2/22/07 For wk 2/17 2007 | ||||||||||||
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Highlights
Jobless claims reversed a big chunk of their prior spike with a 27,000 fall in the Feb. 17 week to 332,000, a level on the outside of expectations. But the level is still well higher than the 287,000 level in the Jan. 13 week, a comparison which matches the survey periods for the monthly payroll report. The comparable four-week averages for the survey week are also unfavorable, at 328,000 for Feb. 17 vs. Jan. 13's 307,250.
Weather, which has been really heavy for parts of the last two weeks, is a major wildcard. The Labor Department said states offered no significant comments on the effect, though last week the department said weather added about one-quarter to that week's giant 46,000 spike. The department cited no special effects in the latest data.
Continuing claims have been moving up in recent weeks but fell back in the Feb. 10 week to 2.509 million. Next week's data on the Feb. 17 week, and its implications for the monthly payroll survey, will be more closely watched.
There was no reaction in the financial markets to this morning's data, though they are certain to muddle expectations for the February employment report (to be released a week after next on March 9).
Initial jobless claims jumped a sharp 44,000 for the week ending February 10 to 357,000. According to the Labor Department, severe weather in the Midwest and Northeast only accounted for about one fourth of the spike. The consumer sector has been the key driving force behind the U.S. economy and any significant deterioration in this sector would be a problem. We would need to see several weeks of elevated jobless claims before that becomes a concern.
Jobless Claims Consensus Forecast for 2/17/07: 325,000
Range: 310,000 to 350,000
![[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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