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Takeaway: As energy companies' hedges expire, jobless claims in energy heavy states are blowing out versus the country as a whole.

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While total U.S. initial unemployment claims remained a healthy 267k in the latest week, the big callout continues to be what's happening in the energy states. The chart below shows the growing chasm between indexed initial claims in our 8-state energy basket vs the country as a whole. As energy companies step up cuts into YE2015 hedge expiration, the spread between energy state claims and total US claims rose from 51 to 59 in the latest week. That marks a new all-time wide since the inception of our tracker back in mid-2014.

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The Data

Prior to revision, initial jobless claims fell 4k to 267k from 271k WoW, as the prior week's number was revised up by 1k to 272k.

The headline (unrevised) number shows claims were lower by 5k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims rose 1.75k WoW to 272.5k.

The 4-week rolling average of NSA claims, another way of evaluating the data, was -5.3% lower YoY, which is a sequential deterioration versus the previous week's YoY change of -7.5%

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Yield Spreads

The 2-10 spread fell -2 basis points WoW to 127 bps. 4Q15TD, the 2-10 spread is averaging 137 bps, which is lower by -16 bps relative to 3Q15.

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Joshua Steiner, CFA

Jonathan Casteleyn, CFA, CMT