Rolling NSA Claims Continue to Reveal Signs of Weakness
Last week initial jobless claims rose 12k WoW to 365k (rising 8k after the 4k upward revision to the prior week's data). Rolling claims fell 2.75k to 365.5k and non-seasonally adjusted claims fell roughly 30k to 310k.
We like to cut through all the noise by looking at the NSA series on a YoY basis. Currently claims are improving at ~5.7% YoY. This rate is down from 6.5% in the prior week and 11.9% at the beginning of this year. While claims are still improving, they are improving at a slower rate. This suggest to us that the fundamentals are weakening in the employment environment. We expect the seasonal adjustment distortions to remain a headwind to claims throughout the month of August. Thereafter, we would expect the seasonality distortion to become less of a headwind, eventually becoming a tailwind that peaks in Feburary/March of 2013.
The 2-10 Spread
The 2-10 spread widened 10 bps WoW to 129 bps. The ten-year treasury yield rose 13 bps to 153 bps.
Financial Subsector Performance
The table below shows the stock performance of each Financial subsector over four durations.
Joshua Steiner, CFA
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