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Takeaway: Another week of decelerating improvement in the labor market appears to be rolling August's softness into September.

Less Good, Again

Last week, we profiled the labor market data as "still good, but less good". The same could be said about this week's numbers. We're cautious to make too much out of a holiday week, but the numbers suggest a real step backward. The y/y change in NSA initial claims, our preferred measure, actually rose +2.1% this week. Only the third time that's happened YTD. That took the rolling 4-wk average to -7.2% y/y vs -8.5% in the prior week. The data is still reasonably good, but it's not as strong as what we saw in the June/July time frame. 

Taken in conjunction with the weak August payroll report last week, this morning's data suggests that softness is continuing into September.

The Data

Prior to revision, initial jobless claims rose 13k to 315k from 302k WoW, as the prior week's number was revised up by 2k to 304k.

The headline (unrevised) number shows claims were higher by 11k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims rose 0.75k WoW to 304k.

The 4-week rolling average of NSA claims, which we consider a more accurate representation of the underlying labor market trend, was -7.2% lower YoY, which is a sequential deterioration versus the previous week's YoY change of -8.5%

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 2

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 3

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INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 5

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INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 7

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 8

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 9

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 10

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 11

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 19

Yield Spreads

The 2-10 spread rose 9 basis points WoW to 197 bps. 3Q14TD, the 2-10 spread is averaging 199 bps, which is lower by -22 bps relative to 2Q14.

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 15

INITIAL CLAIMS - A SOFT START FOR SEPTEMBER - 16

Joshua Steiner, CFA

Jonathan Casteleyn, CFA, CMT