Claims Data Softens a Bit
Initial claims data softened a bit on the week. On a single week basis the rate of year-over-year improvement in NSA claims slipped to -4.9% from -14.2%. On a rolling 4-wk basis, however, NSA claims remained lower year-over-year by -11.1% vs -12.0% in the previous week and are still in-line with the trend line rate of improvement over the past six weeks.
Meanwhile, SA rolling initial claims are now running at sub-300k on a rolling SA basis for the third week in a row. In the past two instances (1 & 2006-2007) the market advanced for 12-18 months after rolling initial claims first dropped below 300k.
The Data
Prior to revision, initial jobless claims rose 22k to 311k from 289k WoW, as the prior week's number was revised up by 1k to 290k.
The headline (unrevised) number shows claims were higher by 21k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims rose 2k WoW to 295.75k.
The 4-week rolling average of NSA claims, which we consider a more accurate representation of the underlying labor market trend, was -11.1% lower YoY, which is a sequential deterioration versus the previous week's YoY change of -12.0%
Yield Spreads
The 2-10 spread fell -1 basis points WoW to 201 bps. 3Q14TD, the 2-10 spread is averaging 203 bps, which is lower by -18 bps relative to 2Q14.
Joshua Steiner, CFA
Jonathan Casteleyn, CFA, CMT
