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The 452k print this morning marks a step forward from the unrevised 480k print last week, and gets things back in line with the 457k and 462k levels three and four weeks ago, respectively.

The rolling average claims improved this week to 465.5k from 468k last week - an improvement of 2.5k, roughly half the slope of 5.3k/week since March (8.5 months of data). We are keeping a close eye on this metric as rolling claims are the leading indicator for ongoing recovery in the economy and, by extension, the loan books for consumer lenders. It’s worth mentioning that claims do experience some seasonality, as people are, on the margin, less likely to file around the holidays, so it is normal to see rolling improvement through mid-January followed by an upswing thereafter. If claims fail to rise post the normal seasonal January improvement this will be a particularly strong sign that the jobless environment is continuing to improve.

MORE IMPROVEMENT IN ROLLING CLAIMS - 1

For those wondering how to interpret a possible inflection in rolling claims in coming weeks, should there be one, we would suggest using a positive slope of 7.2k/week as an outer risk band. This is the fastest weekly rate at which rolling claims increased over a two week period since the trend of improvement began in March. Alternatively, in the absolute, one can use 490-495k as a near-term rolling upper limit based on the downward channel that's been in place since March.