INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK

12/02/10 08:50AM EST

Initial Claims Rise from YTD Lows - Seasonal Factors Likely to Dominate Through Year-End

The headline initial claims number rose 26k last week to 436k.  Rolling claims fell to 431k, 5.75k lower than the previous week.  Rolling claims hit a new YTD low, but the reported series moved off of the lows significantly. We continue to look for claims to in the 375-400k range before unemployment can meaningfully improve.  Seasonal factors appear to dominate into the year-end, as the third chart below shows. Over the next few weeks, the pattern of the last two years suggests that claims will rise further before falling sharply in the last weeks of the year. 

 INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - initial rolling

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - initial raw

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - initial claims

 

Yield Curve Continue to Improve

The following chart shows 2-10 spread by quarter while the chart below that shows the sequential change. After falling sharply for two quarters, the 2-10 spread has stabilized thus far in 4Q, rising 8 bps thus far (average of QTD versus average of 3Q).  Yesterday’s closing value of 243 bps is up from 240 bps last week.

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - 2 10 spread

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - 2 10 spread QoQ

The table below shows the stock performance of each Financial subsector over four durations. 

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - subsector perf

Joshua Steiner, CFA

Allison Kaptur

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