1st Time Jobless Claims Remain Highly Volatile, Falling 10,000 in Last Week

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • 1st time claims for unemployment insurance for the week ended December 3 FELL 10,000 to 258,000;
  • The number of claims for the week ended November 28 was unchanged at 268,000
  • Filings remained under 300,000 for the 92nd straight week, the longest streak since 1970;
  • Four week moving average of first time claims INCREASED 1,000 to 252,500;
  • The four week moving average represented 0.166 percent of total employment, UP .001 percentage points from a week earlier;
  • Continuing claims for the week ended November 28 – reported on a one-week lag – DECREASED 79,000 – largest week-week drop since July 2015 — to 2,005,000;
  • The number of continuing claims for the week ended November 21 was REVISED UP 3,000 to 2,084.000;
  • Four-week moving average of continuing claims FELL 9,500 to 2,028,750;

Image result for unemployment insurance claims

First time claims for unemployment insurance remained extremely volatile as the calendar turned to December, with a five-figure swing for the fifth straight week, according to the Labor Department.

The average change (regardless of direction) for the last five weeks has been 15,400 compared 6,600 for the previous five weeks. To be sure, the net change has been a drop of 7,000 claims over the last five weeks, but the wide swings suggest some instability in labor markets which would call into question the wisdom of tinkering with interest rates in the short term. Nonetheless, “body language” from the Federal Open Market Committee – the federal Reserve Board’s policy-setting arm – suggest the FOMC is poised to lower the target fed funds rate when it convenes next Tuesday. Though widely anticipated, the FOMC action could our a damper on holiday sales. Retailers had been anticipating strong sales, up about 3.6 percent, according to the National Retail Federation (NRF).

The NRF estimated retailers would add between 640,000 and 690,000 jobs to deal with the increased sales volume for the holiday season which, according to NRF, covers all of November and December.

The four week moving average, designed to smooth the volatility of the weekly numbers, is showing less of a swing in the last five weeks ranging from an increase of 1,000 to a drop of 6,000 and a net decline of 5,250 for the period dropping the total to 252,500, 6.7 percent below the level a year ago.

Despite the recent volatility, both initial claims and continuing claims have been on a relatively stable downward trajectory over the past year. Continuing claims, often seen as a surrogate for hiring, are down 10.7 percent from a year ago. The four-week moving average of continuing claims has dropped a more modest7.1 percent.

In raw numbers, continuing claims fell 241,000 in the last year with most of that decline, 137,000, since September 1.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Pending Home Sales Index Leaps to Highest Level in Six Months

Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Association of Realtors’ Pending Home Sales Index (PHSI) JUMPED 5.1 percentage points in February to 112.3, the highest level since last April;
  • The month-month percentage increase was the largest in more than five years, October 2011;
  • Year-year the index ROSE 2.6 percent, the sharpest annual increase since December 2015.

Image result for pending home sales

Despite a still-tight inventory of existing single-family homes remaining tight, the Pending Home Sale Index (PHSI) leapt higher in February, signaling stronger sales (closings) in March and, the National Association of Realtors https://www.nar.realtor/news-releases/2017/03/pending-home-sales-leap-55-in-february  reported Wednesday.

The NAR reported last week existing home sales dropped in February to the lowest level in six months blaming, among other things a weak inventory of homes on the market. But with new data from the Case Shiller Core-Logic Home Price Index showing yet another increase in prices, the number of homes for sale – expanding choice for prospective buyers – should improve.

Home sales though continue to face stiff headwinds. The Federal Reserve’s senior loan officer opinion survey last month – the same month covered by the most recent PHSI – showed bankers reporting a stronger demand for sub-prime mortgage loans but at the same time tightening lending standards for those loans as well as for loans eligible for sale to Fannie Mae and Freddie Mac. At the same time, at its March meeting, the Federal Open Market Committee boosted the fed funds target rate. While not directly linked to mortgage rates, the fed funds rate ultimately leads to higher mortgage loan rates.

The parallel government report on new home sales showed a 6.1 percent jump in sale in February but also with tighter inventories.

An increase in home sales, as suggested by the NAR and government reports, would be welcome news for the real estate and construction sectors but higher prices are a two-edged sword as earnings continue to increase very slowly. With inflation creeping up as well, along with interest rates, prospective buyers could be caught in a dollar squeeze.

Hear Mark Lieberman every Friday on the Morning Briefing on P.O.T.U.S. radio at 6:20 am on the Morning Briefing on P.O.T.U.S., Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

National Case Shiller Home Price Index Up at Slower Pace in January

 

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Case Shiller CoreLogic Home Price Index IMPROVED in January, again reaching a new all-time high; companion indices also strengthened;
  • 10- and 20-city indices ROSE 0.27 percent and 0.21 percent respectively;
  • The price index ROSE in January in 14 of the 20 cities surveyed, down from 18 in December;
  • Prices IMPROVED in three of the four census regions, down only in the Midwest;
  • Year-year prices were UP in all 20 cities but the January increase was slower in eight cities than the increase from December 2015 to December 2016.

Image result for home prices

Home prices continued their upward climb in January, but at a slower pace than December, according to the monthly Case Shiller CoreLogic Home Price Index released Tuesday.   Still, the 185.51 national index was the highest on record.

The 20-city index rose 0.21 percent to 192.81 compared with December’s increase of 0.30 percent; the 10-city index rose 0.27 percent to 206.73, down from an increase of 0.31 percent in December. The national index grew 0.16 percent in January, off slightly from the 0.18 percent increase in December.

The 10- and 20- city indices are off 5.1 percent and 5.7 percent respectively from all-time highs.

The improving prices could help sales by replenishing inventories of homes for sale. According to the National Association of Realtors (NAR), the number of homes for sale has been down year-year for 21 straight months. The months’ supply of existing single family homes for sale edged up to 3.8 in February, down from 4.4 months a year earlier.

Per the Case-Shiller data, prices rose fastest in January in San Diego (0.8 percent), Las Vegas and Seattle (0.6 percent) and Denver (0.5 percent). Prices fell most sharply in Minneapolis (down 0.6 percent) and Cleveland (down 0.5 percent).

Regionally, month-month prices were up in January up 0.4 percent in the West, 0.3 percent in the Northeast and 0.2 percent in the South, while dropping 0.3 percent in the Midwest.

Year over year, Seattle was the only city to experience a double-digit percentage price increase, up 11.3 percent.

Hear Mark Lieberman this Friday on P.O.T.U.S. radio’s Morning Briefing, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

New Home Sales Up in February; Prices Down Sharply

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Pace of contracts for new home sales ROSE 6.1 percent in February on top of an upwardly revised 5.3 percent increase in January;
  • Unsold inventory ROSE 4,000 to 266,000 – highest level since July 2009;
  • Months’ supply of new homes for sale FELL to 5.4 months in February;
  • Median price of a new home FELL 3.9 percent or $12,000 from January to $296,200 – lowest since last July; median price down 4.9 percent or $15,100 in the last year, steepest year-year decline (dollars) since January 2012.

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New home sales spurted again in February as builders saw prices tumble, the Census Bureau and department of Housing and Urban Development reported Thursday.

The report – tracking contracts for the purchase of newly built homes – also underscored the relationship between sales and prices, though median prices are affected by the mix of transactions in a given month. Nonetheless, buyers appear to have been shifting to lower-priced homes. In February, 52percent of home sold carried price tags of $299,999 or less compared with 46 percent in January. In all of 2016, just 45 percent of all home sold were priced that low.

The shift suggests more buyers are shopping using the monthly payment as a guide, a trend exacerbated by the recent increase in interest rates by the Federal Open Market Committee. Though the FOMC sets the target rate for the fed fund, the rate banks charge each other for overnight borrowing, that rate creeps into the mortgage rate.

The FOMC raised rates at its meetings in December and earlier this month and is expected to bump rates higher perhaps twice more this year.

Despite the lower prices new homes are fetching, builders earlier this month registered their highest confidence levels in 12 years. The National Association of Home Builders’ (NAHB) reported its Housing Market Index (HMI) shot up six points to 71. (Though the index reading is for March, it is based on a survey in the first 10 days of the month and more accurately reflects the prior month.) Year-over year, the HMI the index is up 13 points, strongest 12-month gain since October 2013.

Construction sector employment is up as well. The number of construction jobs increased 58,000 in February, the strongest month-month gain since February 2006. In the last six months, construction payrolls have gone up by 177,000 or about 2.6 percent with residential construction payrolls accounted for 110,000 of those new construction jobs.

That the inventory of homes for sale was 266,000 is both good and bad news for. The bad news is, of course, builders are saddled with carrying costs. The good news for buyers is the wider range of choice. Anecdotal reports suggest builders are reviving a practice of offering incentives to buyers. It is for builders a case of “be careful; what you wish for.” Real estate advocates have been concerned at the absence of inventory – of both new and existing or “used homes, discouraging buyers from even shopping.

Hear Mark Lieberman on P.O.T.U.S. (Sirius-XM 124) Friday at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

Initial Claims Jump due to Seasonal Factors

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • 1st time claims for unemployment insurance for the week ended March 18 JUMPED 15,000 TO 258,000; the highest level in two months
  • The number of initial claims for the week ended March 11 was UNCHANGED at 243,000;
  • The smoothing four-week moving average of first time claims ROSE 1,000 to 240,000 or 0.158 percent of total employment, UP from 0,157 percent a week earlier;
  • Continuing claims – reported on a one-week lag – for the week ended March 11 FELL 39,000 to 2,000,000;
  • The number of continuing claims for the week ended March 4 was REVISED UP 9,000 to 2,039,000;
  • Four-week moving average of continuing claims FELL 32,000 to 2,026,750.

Image result for unemployment insuranceThe number of first time claims for unemployment insurance for the week ended March 18, rose sharply according to the Labor Department, pulled up by seasonal adjustment factors which remain low.

The seasonal adjustments, developed to account for predictable recurring events such as holidays and historic weather patterns, this week adjusted the raw numbers because of a later than normal Easter. As a result, although the raw number of claims increased a modest 2,300 once the adjustment factor was applied the increase in claims was larger.

Since the sizable increase in claims was due to the seasonal adjustment, the spike should not be a cause for alarm. Indeed, the adjustment factor will drop further for next week’s report.

Even with the (adjusted) increase the four-week moving average first time claims as a percentage of employment remains extremely low, supporting the Federal Open Market Committee’s decision last week to hike the target fed funds rate and all but forecast at least one more increase in rates this year.

As an indicator of the Bureau of Labor Statistics’ employment situation report to be released April 7, the claims report continues to throw out mixed signals. From mid-February to mid-March, the number of claims increased by 4,000 but the four-week moving average fell 3,500. In advance of the employment situation report for February, claims rose mid-month to mid-month, but eh four week moving average declined and according to the report, the economy added 235,000 jobs while the unemployment rate dipped to 4.7 percent.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

February Existing Home Sales Suffer Sharpest Drop in 12 Months

 By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales DROPPED 210,000 3.7 percent in February to a seasonally adjusted annual sales rate of 5.48 million;
  • The January sales rate was UNCHANGED at 5.69 million the fastest pace since July 2007;
  • Median price of an existing single family home ROSE 0.5 percent or $1,100 to $228,400 in February, the strongest month-month increase since last June;
  • Year-year the median price is UP $16,300 or 7.7 percent, the largest year-year increase since January 2016;
  • Number of homes available for sale ROSE for the second straight month, up 4.2 percent or 70,000 to 1.75 million, but remained under 2 million for the fourth straight month;
  • The months’ supply of homes for sale in November ROSE to 3.8, up 0,3 months from January, the largest month-month increase since last April.

Image result for existing home sales

Demonstrating again the relationship between prices and sales, existing home sales fell in February as prices rose, the National Association of Realtors  reported Wednesday. Indeed, it was the fourth time in the last six months, sales and prices moved in opposite directions.

But the higher prices had one benefit as the number of homes available for sale in February increased, a good sign for shoppers. Because of the lower sales pace, the months’ supply of homes for sale also increased.

Just as there were concerns a month ago when lower prices led to a decline in the number of homes for sale, the bump in homes on the market should help future sales.

Unlike the government report on new home sales to be released Thursday, the NAR report tracks closings. The government report tracks contract signings.

The weaker sales (closings) came even though the NAR’s pending home sales index – a measure of contracts – went up 0.8 percent in December. The pending sales index fell 2.8 percent in January.

The NAR report covered the period before the Federal Open Market Committee hiked the target fed funds rate which could send mortgage higher. When the FOMC raised rates in December, it took about two months for the increase to show up in mortgage rates.

According to Freddie Mac which conducts a weekly survey of mortgage rates, the average rate for a 30-year fixed rate mortgage was 4.17 percent in February, up slightly from 4.15 percent in January.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

Initial Claims For Unemployment Insurance Resume Decline

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • 1st time claims for unemployment insurance for the week ended March 11 DIPPED 2,000 TO 241,000;
  • The number of initial claims for the week ended March 4 was REMAINED at 243,000;
  • The four-week moving average of first time claims ROSE 750 to 237,250 or 0.156 percent of total employment, UP from 0,155 percent a week earlier;
  • Continuing claims – reported on a one-week lag – for the week ended March 4 FELL 30,000 to 2,030,000;
  • The number of continuing claims for the week ended February 25 was REVISED UP 2,000 to 2,060,000;
  • Four-week moving average of continuing claims FELL 11,750 to 2,054,250.

 

Image result for unemploymentThe number of first time claims for unemployment insurance for the week ended March 11, fell again according to the Labor Department, but the decline was a modest 2,000 after back to back weeks when the change in the number of claims averaged 19,500.

The relative stability itself supported the action of the Federal Open Market in raising the target fed funds interest rate. One of the objectives of the Federal Reserve is market stability whether it be [prices, as measured by inflation indicators, or sustainable growth as measured by unemployment. That the number of claims for first time unemployment insurance benefits may have stabilized suggests the FOMC may be successful.

Probably the strongest indicator of that success or stabilization is tracking unemployment insurance claims as a percentage of employment.

That percentage has been dropping steadily from 0.188 percent a year ago to 0.156 percent in line with the steady decline in the total number of persons unemployed. As a leading indicator, the series of first time claims for unemployment insurance remains a canary in the coal mine.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Housing Starts, Completions Spurt in February; Permits Decline

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The rate of housing starts in February ROSE 3.0 percent to a seasonally adjusted 1.29 million units, led by 6.5 percent increase in single-family starts;
  • The pace of building permits FELL 6.2 percent to a seasonally adjusted annual rate of 1.2 million – falling from a 9 ½ year high in January;
  • Permits for single-family homes ROSE 3.1 percent but permits for multi-family housing FELL 21.6 percent;
  • The rate of home completions ROSE 5,4 percent with completions of single-family homes DROPPING 6.5 percent while completions of multi-family units ROSE 43.4 percent.

Image result for housing constructionWith a surge in single-family construction activity housing starts rose in February but the single-family activity was not strong enough to overcome a decline in multi-family permits, the Census Bureau and Department of Housing and Urban Development reported Thursday. http://www.census.gov/construction/nrc/pdf/newresconst_201702.pdf.

Change since January 2017

  Permits Starts Completions
Total
Single-Family
Multi-Family

 

 

 

 

The report continued to paint a picture of a housing market with no clear direction and came one day after the National Association of Home Builders’ (NAHB) reported its Housing Market Index (HMI) shot up six points to 71, its highest level since June 2005. (Though the index reading is for March, it is based on a survey in the first 10 days of the month and more accurately reflects the prior month.) Year-over year, the HMI the index is up 13 points, strongest 12-month gain since October 2013.

More telling, perhaps, the number of construction jobs increased 58,000 in February, the strongest month-month gain since February 2006. In the last six months, construction payrolls have gone up by 177,000 or about 2.6 percent. In the same span, residential construction payrolls accounted for 110,000 of those new construction jobs.

Still stymying the housing market would be Wednesdays action by the Federal Open Market Committee increasing the target fed funds rate by 25 basis points (¼ of one percent). In time that increase will flow through the mortgage rates.

That multi-family permits dipped runs counter to recent experience which has shown younger families tend to prefer renting or housing closer to central cities. Indeed, the percentage of permits for single-family homes, though up in February, has been trending down both in permits and starts.

Builders continue to add to inventories. In January, for example, completions exceeded new home sales by 251,000 (seasonally adjusted annual rate), the most since June 2010. If supply and demand metrics hold, that excess should drive the price of a new home down, dampening builder optimism.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

FOMC Lifts Fed Fund Rate

By Mark Lieberman

Managing Director and Senior Economist

Image result for federal open market committee

To the surprise of no one, the Federal Open Market Committee Wednesday voted 9-1 to increase the target fed funds rate by ¼ of one percent. To ¾ to 1 percentage point.  Only Neel Kashkari, president of the Minneapolis Federal Reserve Bank voted to maintain the rate at its current level of ½  to ¾  percentage points.

The Committee, in the minutes of its January meeting and in remarks of individual members in recent weeks as well as Congressional testimony by FOMC chair Janet Yellen hinted strongly the benchmark rate would go up.

The higher fed funds rate has an immediate impact on the prime rate, the rate banks charge their most credit worthy customers. Since certain other consumer rates – home equity loans, credit card interest and some auto loans are keyed to the prime rate, those rates will increase as well.

Dr Yellen, at a press conference following the FOMC meeting said she met with both President Trump and Treasury Secretary Steven Mnuchin in advance of the FOMC meeting but did not indicate whether either of them had tried to dissuade the FOMC from raising rates. The impact on longer term interest rates is less direct but will eventually show up in higher mortgage rates and either affect home sales or home prices or both.

The rate hike will also mean the federal government will pay more for its borrowing. Federal interest payments, measured as a share of the economy, are expected to double over the next decade, ordign to the Congressional Budget Office.

Although they will pay more to borrow, consumers, Dr. Yellen said, should be happy about the rate increase

“The simple message is, the economy is doing well,” she said

The Committee’s end-of-meeting statement contained similar sentiment,

“Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace,” the Committee said in its statement. “Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat.”

At the same time, the FOMC suggested it was not done raising rates.

“The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the Committee statement said. “However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

The language was slightly changed from earlier meeting-end statements which had said conditions would warranet “only” gradual uncreases.

Dr. Yellen at her news conference, downplayed the significance of the change. “This is something that shouldn’t be over-interpreted,” she said. The word gradual, she said, seems apt.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

 

 

 

 

Unemployment Rate Dips to 4.7%; Payrolls Up 235K; Fed Hike More Likely

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Unemployment rate FELL in January to 4.7 percent, after two straight monthly increases;
  • Payroll jobs INCREASED 235,000 in February revisions to prior months ADDED another 9,000 jobs net: December job growth was revised down 2,000 but January job growth was revised up 11,000;
  • Private sector payrolls rose 227,000 in February, while governments added 8,000 jobs, mostly at the local level;
  • Average weekly hours in February REMAINED at 34.4 for the sixth straight month;
  • Average weekly earnings INCREASED in February to $897.50 — up $2.07 from January and 2.8 percent since February 2016;
  • Average hourly earnings ROSE 6¢ in February to $26.09, also a 2.8 percent year-year jump.
  • The number of full-time workers INCREASED 326,000 in February; the number of part-time workers ROSE 149,000;
  • Labor force participation rate INCREASED to 63.0 percent, the highest since last March;
  • Employment-Population ratio ROSE to 60.0 percent, the highest level since February 2009;
  • The number of multiple jobholder went UP 260,000; multiple jobholders represent 5.1 percent of all employed individuals, up from 4.9 percent in January;

Image result for employment situation report

The first employment situation report, of the Trump Administration came in with a roar with virtually all indicators showing positive changes. The strong report makes it a virtual certainty the Federal Open Market Committee will raise the target fed funds rate at its meeting next week.

In advance of the release of the numbers the President himself retweeted a Drudge report about the numbers adding the comment “Great Again.’ (The President may have violated a protocol which prohibits the Executive branch — except for the Labor Department itself – from commenting on the number for an hour after the report is released.)

Candidate Trump a year ago tweeted “Don’t believe those phony numbers when you hear 4.9 & 5% unemployment … 5% figure is one of the biggest hoaxes.”

Except for the retail sector, which shed 26,000 jobs, there were job gains across there were job gains across the board, led by 58,000 new construction jobs. The construction sector has now added 110,000 jobs in the last three months, 60,000 of which were for the construction of residential buildings which could help ease the inventory pressures in the home sales market.

The only possible disappointment in the report was the average workweek which remained at 34.4 hours. Increases in the workweek — especially as hourly earnings are going up – mean either existing workers are taking home more or that businesses need more employees.

Despite the fact the report also showed a sharp increase in the number of multiple jobholders – up 260,000 in February – the ranks of the unemployed fell 107,000 and the number of persons not in the labor force dropped 176,000. The labor force participation rate rose to 63.0 percent, the highest it’s been since last March. The employment-population ratio (EPOP), said to be fed chair Janet Yellen’s favorite stat, rose to an eight-year high of 60.0 percent.

The data suggest though not all segments of the population are benefiting from the stronger labor market. The unemployment rate for African-Americans rose 0.4 percentage points to 8.1 percent. The unemployment rate for individuals without a high school diploma went up 0.2 percentage points to 7.9 percent and for the with some college or an associate degree also rose 0.2 percentage points, to 4.0 percent.

According to the report, there were 27,000 re-entrants to the labor force during the month signaling a renewed optimism in the ability to find a job, a view underscored by the 60,000 increase in the number of “job leavers” during February.

More than half (14,600) of the 26,000 retail job cuts came at general merchandise stores. Restaurant jobs accounted for 16,700 of the 26,000 increase in jobs in the leisure and hospitality sector.

A key economic barometer in the Employment Situation report, the “diffusion indexes” which track the net number of industries increasing employment showed strong gains: the index of all private firms was a net 63.0 (compared with 58.0 in January) and the index of manufacturing was 65.4, the highest level since November 2014, up from 50.0 in January. A value above 50 indicates more component industries gained jobs than lost them.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124.

You can follow Mark Lieberman on Twitter at @foxeconomics.

 

Initial Claims Jump One Week After Dropping to 44-Year Low

 

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • 1st time claims for unemployment insurance for the week ended March 4 SURGED 20,000 or 9.0 percent to 243,000, more than overwhelming the 19,000 drop in claims one week earlier;
  • The number of initial claims for the week ended February 25 was REMAINED at 223,000, the lowest level in 44 years;
  • The four-week moving average of first time claims ROSE 2,250 to 236,500 or 0.156 percent of total employment, UP from a week earlier;
  • Continuing claims – reported on a one-week lag – for the week ended February 25 FELL 6,000 to 2,058,000;
  • The number of continuing claims for the week ended February 18 was REVISED DOWN 2,000 to 2,064,000;
  • Four-week moving average of continuing claims FELL 5,750 to 2,065,500.

Image result for unemployment insurance claims

The data series of first time filings for unemployment insurance showed again why it is one of the most volatile economic indicators, leapfrogging last week’s 19,000 decline with a 20,000 increase, according to the Labor Department.

Still the weekly fluctuations will not spoil Friday’s Employment Situation Report which is expected to show the economy added 190,000 jobs and the unemployment rate dipped to 4.7 percent from 4.8 percent. If the numbers are as strong as expected, the Federal Reserve will have no reason to not increase the target fed funds rate when the Federal Open Market Committee meets next week.

It would a strong first report under the Trump Administration but might be hard to point to any one step the new President has taken to cause the positive results, The first employment situation release under Barack Obama showed a drop of 702,000 jobs (down from 793,000 the previous month) and an unemployment rate of 8.3 percent, up from 7.8 percent.

Of course, over the eight years of the Obama Administration, employers added almost 12 million jobs and the unemployment rate dropped to 4.8 percent, suggesting the first month may be nothing more than the first month’s results.

(In the first month of George W. Bush’s tenure in the White House, the economy added 71,000 jobs and the unemployment rate was 4.2 percent before beginning a 3.6 percentage point increase. And the number of jobs during the Bush years rose just 1.3 million.)

A key number to watch in Friday’s report – in addition to hourly and weekly earnings – will be the average workweek which has been tuck at 34.4 hours. As the work week increases, employers will start to feel the need for additional hiring and probably higher wages.

You can hear Mark Lieberman tomorrow at 8:45 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124 and again 1t 12;05 pm on the Midday Briefing on POTUS. You can follow him on Twitter at @foxeconomics.