Initial Jobless Claims Punch Through 350,000

Last week I said we should expect the 4 week moving average of Initial Jobless Claims to punch through the 350,000 mark. That's exactly what happened in the latest week. From the Department of Commerce:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Feb.16, the advance figure for seasonally adjusted initial claims was 349,000, a decrease of 9,000 from the previous week's revised figure of 358,000. The 4-week moving average was 360,500, an increase of 10,750 from the previous week's revised average of 349,750.

The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending Feb. 9, unchanged from the prior week's unrevised rate of 2.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Feb. 9 was 2,784,000, an increase of 48,000 from the preceding week's revised level of 2,736,000. The 4-week moving average was 2,752,500, an increase of 28,750 from the preceding week's revised average of 2,723,750.

The 4-week MA excluding hurricane Katrina, is at it's highest level since Feb 2004. Interestingly last week's numbers were revised up from 349,000 to 358,000. Interesting because revisions are usually small.

To be clear there is nothing magical about the 350,000 level. From the chart above you can see that the 4-week MA briefly rose to the 390,000 level in 1996 without a recession. A sustained level of over 400,000 would be needed to confirm a recession. However, waiting for the data to confirm is of little help. Combined with other economic data I think the recession call is an easy one to make.