Jobless Claims Defy Expectations

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Of all the economic indicators on the calendar, none has been more surprising in its consistent strength than jobless claims, and this week's report was just another example. While economists were forecasting first time claims to come in at a level of 252K, the actual reading came in at 234K, marking the third straight week that claims came in better than expected. Also, the current level of 234K is just 1K above the cycle low of 233K from early November and marks the 98th straight week where claims have been below 300K.

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With this week's low reading in claims, the four-week moving average plummeted by 9.75K to 246.75K taking out the prior cycle low of 249.5K from October. A drop of 9.75K may not sound like much, but it was the largest one-week decline in the four-week average since March 2015. The last time the four-week moving average was this low was in 1973, when the US population was less than two-thirds the size it is now.

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On a non-seasonally adjusted basis, claims also plummeted by 66K down to 346.3K. Amazingly, that's nearly 200K below the average of 542K for the current week of the year going back to 2000 and you have to go all the way back to 1969 to find a year where the NSA weekly reading was lower at this time of year. Back then, Donald Trump was just getting out of college and getting his feet wet in the real estate business.

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