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Initial claims this week fell 21k (18k net of the revision).  This positive print continued the volatile pattern of the last four weeks, in which the week-over-week change has been more than 15k up or down each week.  The four-week rolling average, which removes this volatility, decreased by 1k to 466k.  For another week, claims remain in the 450-470k range they've occupied for most of the year, well above the 375-400k range needed for unemployment to materially improve.  

INITIAL JOBLESS CLAIMS FALL 21K (1K ON A ROLLING BASIS) - rolling

Below we chart the raw claims data. 

INITIAL JOBLESS CLAIMS FALL 21K (1K ON A ROLLING BASIS) - raw

Below, we chart US equity correlations with Initial Claims, the Dollar Index, and US 10Y Treasury yields on a weekly basis going back 3 months, 1 year, and 3 years.Not surprisingly, Consumer Discretionary has the largest inverse correlation to Initial Claims (r-squared = 0.70) on a 1-year basis. On the flip side, it is a surprise to see that the Financials have the second lowest inverse correlation to Initial Claims (r-squared = 0.27) on a 1-year basis.

INITIAL JOBLESS CLAIMS FALL 21K (1K ON A ROLLING BASIS) - 1

As was noted in last Friday's unemployment report, May was the peak month of Census hiring, and it should be a headwind to jobs from here as the Census winds down.

INITIAL JOBLESS CLAIMS FALL 21K (1K ON A ROLLING BASIS) - census chart

 

Joshua Steiner, CFA

Allison Kaptur