Remarkably Consistent
We're beginning to feel like a broken record with our call on initial jobless claims, stating almost every week how the data is improving at an accelerating rate. This week's data again reflects that trend.
Nevertheless, we urge investors to continue to care. Why? With the broader market, and the Financials sector alongside it, gripped in uncertainty over whether we're poised for a meaningful correction, we continue to regard the claims data as the strongest indicator supporting our ongoing bullish bias and buy-the-dip view. Regrettably for those waiting patiently, there hasn't really been much of a dip.
The bottom line is that the labor market is humming along nicely at this point with rolling non-seasonally adjusted (NSA) claims down 11.2% year-over-year (YoY), the fastest rate of improvement since May 2012. Additional anecdotal evidence continues to emerge that at least a portion of the broadening base of employment is a reflection of employers responding to Obamacare. The bottom line, however, is that the labor market tends to be very self-reinforcing. Baring a significant external shock, we see little reason to expect the current trajectory to deviate from its trend.
The Data
Prior to revision, initial jobless claims fell 8k to 323k from 331k week-over-week (WoW), as the prior week's number was revised up by 1k to 332k.
The headline (unrevised) number shows claims were lower by 9k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -3k WoW to 328.75k.
The 4-week rolling average of NSA claims, which we consider a more accurate representation of the underlying labor market trend, was -11.2% lower YoY, which is a sequential improvement versus the previous week's YoY change of -10.4%