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No Change in Initial Claims


Initial claims were flat at 423k WoW, as the 3k headline decline was offset by the 3k upward revision to last week’s print.  Rolling claims rose for the first week in six to 426k, 2.5k higher than the previous week.  We continue to remind investors that based on our analysis of past cycles, the unemployment rate won't improve until we see claims move into the 375-400k range. That said, it is worth highlighting an important caveat. This recession has been different in that it has pushed the labor force participation rate down by ~200 bps, which has had a correspondingly positive improvement on the unemployment rate. In other words, the unemployment rate isn't really 9.5%, it's 11.5%. So when we say that claims of 375-400k will start to bring down the unemployment rate, we are actually referring to the 11.5% actual rate as opposed to the 9.5% reported rate.

Initial Jobless Claims Hold Flat Excluding Revisions - rolling claims

Initial Jobless Claims Hold Flat Excluding Revisions - raw claims

Yield Curve Comes In Slightly


We chart the 2-10 spread as a proxy for NIM. Thus far the spread in 4Q is tracking 20 bps wider than 3Q.  The current level of 272 bps is down from 287 bps last week.

Initial Jobless Claims Hold Flat Excluding Revisions - spread

Initial Jobless Claims Hold Flat Excluding Revisions - spreads QoQ

Financial Subsector Performance


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

Initial Jobless Claims Hold Flat Excluding Revisions - performance

Joshua Steiner, CFA

Allison Kaptur