Back to Normal
Last week jobless claims rose 18k to 361k, but the 4-week rolling average declined 14k to 368k and is now back to pre-Sandy levels. For the last month we've profiled NY, NJ and PA's share of claims. As of the most recent state data, which is released on a 1-week lag vs the nationally reported data, NY and PA have fully re-normalized. New Jersey, however, still remains at around 150% of its long-term average rate of claims (down from 408% the week of November 17th) , suggesting there may still be a small further tailwind in store for claims.
Overall, we expect claims will continue to move lower in the coming months (through Februrary), propelled by a seasonality distortion tailwind. This, coupled with the strengthening/accelerating housing data, should keep the wind at the back of large-cap financials BAC & C.
Joshua Steiner, CFA