Hanover Advisors : Jobless Claims

Jobless claims may have already hit their lows, at least that's the emerging trend for initial claims which posted a sizable 10,000 rise in the January 16 week to a much higher-than-expected 293,000. This is the highest reading since July. The consensus was looking for only 275,000 with the high-end estimate at just 285,000. This is the second straight gain and the third in four weeks and has driven the 4-week average to 285,000 which, against the month-ago comparison, is up 14,250 to offer a negative indication for the January employment report (this comparison matches the sample weeks of the monthly employment reports).
But continuing claims aren't yet confirming any slowing in the jobs market, falling a sharp 56,000 in lagging data for the January 9 week. The 4-week average, at 2.228 million, is trending only marginally above the month-ago trend. And the unemployment rate for insured workers, at 1.6 percent, is down 1 tenth in the week.
There are no special factors affecting the data though volatility in this series is not unusual at the start of the year. Still, the big rise in initial claims will set up expectations for a much less strong employment report for January than what proved to be an unusually strong December report.