Jobless Claims: Another Surprising Drop

Bottom Line:  Jobless claims dropped to their lowest level in five weeks, dropping to 190k, below expectations for a rebound to 195k. Our Nowcast model has also confirmed the stubbornly low level of claims, with this week running nearly unchanged from last week. While the models have forecast claims correctly, the overall low level remains surprising relative to the slow pace of overall economic growth. We remain mindful that some employees who lost jobs in the early rounds of significant company layoff announcements last year will start to lose severance pay and could be looking to collect benefits in the coming months. So while claims remain historically low, we are watching closely for signs of an uptick in the trend. So far, there are none.Initial Jobless Claims FELL -2k in the week ended February 25th to 190k, BELOW the 4-week average of 193k, BELOW the 13-week average of 202.07692k but 8k ABOVE the year-ago level. Non-seasonally adjusted Claims FELL -9.297k.

Continuing Claims FELL -5k in the week ended February 18th to 1.655M, BELOW the 4-week average of 1.6715M, BELOW the 13-week average of 1.67M but 32k ABOVE the year-ago level. Continuing Claims for the 11th of Feb were revised up from +1.654M to +1.66M.