INITIAL JOBLESS CLAIMS | SLIGHT RISE BUT STILL LOW

Takeaway: Claims bounced in the latest week but remain extremely low. Energy states have recoupled to the US and were flat in the latest week.

Following last week's 42 year low in claims, SA claims, not surprisingly, rose by 12k. Nevertheless, claims remain at a very low 267k in the latest week. Year-over-year improvement in rolling NSA claims held steady at -7.8%, but, as we have flagged repeatedly, should begin to converge towards zero from a Y/Y rate of change standpoint in the coming months as comps run into the sub-300k environment that began in the Fall of 2014. 

Meanwhile, the improvement/re-convergence in energy state claims versus the country as a whole has sustained itself for a second week. The now nominal spread between the two series was essentially flat W/W as we show in the below chart. However, chatter has re-emerged around another spike in energy layoffs as energy prices have fallen off again in the past month.

INITIAL JOBLESS CLAIMS | SLIGHT RISE BUT STILL LOW - Claims18

Prior to revision, initial jobless claims rose 12k to 267k from 255k WoW, as the prior week's number was not revised. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -3.75k WoW to 274.75k.

The 4-week rolling average of NSA claims, another way of evaluating the data, was -7.8% lower YoY, which is consistent with the same reading in the previous week.

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Yield Spreads

The 2-10 spread fell -2 basis points WoW to 159 bps. 3Q15TD, the 2-10 spread is averaging 167 bps, which is higher by 9 bps relative to 2Q15.

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Joshua Steiner, CFA

Jonathan Casteleyn, CFA, CMT