Last week's initial claims data was distorted by the DOL's incorporation of estimates for CT & IL as both state offices were closed due to the snowstorm and unable to report official figures - meaning we had to wait for this week's data for a true update on the underlying labor market trend. With non-seasonally adjusted claims registering further sequential improvement, this week's data indicate that labor trends continue to strengthen.
Labor Market Improves Further In Latest Week
This week's backup in initial claims (SA) was a bit of a negative surprise, as the last four years have shown steady improvement throughout February. As a reminder, the seasonally-adjusted tailwinds will be coming to an end in a few weeks.
Prior to revision, initial jobless claims rose 21k to 362k from 341k WoW, as the prior week's number was revised up by 1k to 342k.
The headline (unrevised) number shows claims were higher by 20k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims rose 8k WoW to 360.75k.
The 4-week rolling average of NSA claims, which we consider a more accurate representation of the underlying labor market trend, was -4.2% lower YoY, which is a sequential improvement versus the previous week's YoY change of -2.7%. This is good news, as it signals that the real labor market is, in fact, still strengthening.
Joshua Steiner, CFA