U.S. Initial Unemployment Insurance Claims Rise; Total Claimant Level Falls

Initial claims for unemployment insurance increased 6,000 to 211,000 during the week ended January 18. Claims were unchanged y/y. The previous week's figure was revised to 205,000, from 204,000. The Action Economics Forecast Survey expected 212,000 initial claims. The four-week moving average of initial claims declined to 213,250, the lowest level since late September.

The latest initial claims figure covers the survey week for January nonfarm payrolls. Claims fell 24,000 (-10.2%) from the August period. During the last 20 years, there has been a 71% correlation between the level of initial claims and the y/y change in nonfarm payrolls.

Continuing claims for unemployment insurance in the week ended January 11 declined 37,000 to 1.731 million (+1.4% y/y) from the prior week's 1.768 million, revised modestly from 1.767 million. The four-week moving average of claimants rose to 1.758 million, the highest level since May 2018.

The insured rate of unemployment was steady at 1.2%, where it has been since mid-November.

Insured unemployment rates continued to vary widely by state. During the week ending January 4, the lowest rates were in Florida (0.41%), North Carolina (0.48%), Nebraska (0.59%), Virginia (0.63%) and Arizona (0.64%). The highest rates were in Montana (2.59%), Rhode Island (2.60%), Connecticut (2.87%), New Jersey (3.00%) and Alaska (3.03%). Among the other largest states by population, the rate was 1.15% in Texas, 1.96% in New York and 2.06% in California. These state data are not seasonally adjusted.

Data on weekly unemployment claims dating back to 1967 are contained in Haver's WEEKLY database, and they are summarized monthly in USECON. Data for individual states are in REGIONW. The expectations figure is from the Action Economics Forecast Survey, carried in the AS1REPNA database.

The Conference Board's Composite Index of Leading Economic Indicators remained unchanged (+0.1% y/y) during November. This came after October's 0.2% decline, revised from -0.1%, and an unrevised 0.2% shortfall in September. The index also fell 0.2% in August. The latest reading matched expectations in the Action Economics Forecast Survey. The series is comprised of 10 components which tend to precede changes in the overall economy.

Performance amongst the components of the Leading Indicator index remained mixed last month. Contributing positively to the index change were stock prices, factory orders for consumer goods, building permits, the yield spread between 10-year Treasuries & Fed Funds, consumer expectations for business/ economic conditions and the leading credit index. Contributing negatively were initial claims for unemployment insurance and the ISM new orders index. Holding steady were the average workweek and nondefense capital goods orders excluding aircraft.

Three-month growth in the leading index of -1.4% (AR) was negative for the second straight month and below the high of +9.1% in December 2017. The y/y change eased slightly to 0.1% compared to a 6.6% high in September of last year.

The Index of Coincident Economic Indicators rose 0.4% during November (1.5% y/y) after easing 0.1% in October, revised from no change. Each of the component series contributed positively to last month's rise including payroll employment, personal income less transfer payments, manufacturing & trade sales and industrial production.

Three-month growth in the coincident index held steady m/m at 1.5% (AR) but was down from 2.3% in August.

The Index of Lagging Economic Indicators improved 0.5% in November (2.6% y/y) after rising 0.2%, revised from 0.1%. Contributing positively to the index change were the average duration of unemployment, the ratio of consumer credit outstanding to personal income and six-month growth in the services CPI. The prime rate charged by banks and growth in factory sector unit labor costs contributed negatively to the index change. The business sector I/S ration held steady as did commercial & industrial loans outstanding.

Three-month growth in the lagging index was 3.0%, up from -1.1% in October. Twelve-month growth has been fairly steady at 2.6%.

The ratio of coincident-to-lagging economic indicators is sometimes considered a leading indicator of economic activity. It was unchsssssssssanged from October but up from the July low.

The Conference Board figures are available in Haver's BCI database; the components are available there, and most are also in USECON. The expectations are in the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.