U.S. Initial Jobless InsuranceClaims Fall Back To New Low

The jobs market resumed its recent trend toward improvement. The Labor Department reported that initial claims for unemployment insurance fell to 452,000 from an unrevised 480,000 during the prior week. Claims now stand at the lowest level since the first week of September 2008 and were down from the recession peak of 674,000 hit in March. The four-week moving average of claims also fell to a new low of 465,250. The latest weekly figure was lower than Consensus expectations for 470,000 claims.

Continuing claims for unemployment insurance during the latest week fell 127,000 after an upwardly revised 40,000 gain during the prior week. Continuing claims were at the lowest level since February. The overall decline is a function of the improved job market but also reflects the exhaustion of 26 weeks of unemployment benefits. Continuing claims provide an indication of workers' ability to find employment. The four-week average of continuing claims fell to 5,233,000. This series dates back to 1966.

Extended benefits for unemployment insurance dropped sharply to 393,956 during the first week of December. The latest was down from the peak during last month of 597,688.

The insured rate of unemployment remained stable at 3.9%, the lowest level since February. The rate reached a high of 5.2% during late-June. During the last ten years, there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics. 

The unemployment insurance claims data is available in Haver's WEEKLY database and the state data is in the REGIONW database. 

Despite only a modest rise in November durable goods orders, the trend has improved sharply. Durable goods orders rose 0.2% last month after an unrevised 0.6% October decline. The latest increase lifted orders 5.4% above the March low and the y/y decline of 7.8% compares with a peak 26.6% decline last winter. A 0.5% November gain had been the Consensus expectation.

A 5.5% (-10.9% y/y) decline in transportation equipment orders in fact masked the degree of improvement in overall orders. Transportation orders were pulled down by a 32.6% (-3.7% y/y) decline in civilian aircraft. Excluding transportation altogether, orders rose 2.0% during November and have risen 7.3% from their April low.

Primary metals orders also continued their recovery with a 1.4% November increase (-7.3% y/y) and they have risen one-quarter from the March low. Electrical equipment orders rose about as they did during October. The 3.2% gain lifted orders 10.0% from the spring low. Orders for computers & related equipment also improved for the second month by 1.6% during November. The increase lifted them 14.9% above April's low. Finally, machinery orders increased 3.5% (-14.0% y/y), made up half of the October decline and raised them 9.8% from the low.

The decline in aircraft bookings also masked improvement in other capital goods orders. Nondefense capital goods orders less aircraft more than recovered the October slump with a 2.9% increase and they now are 9.8% above the April low.

Shipments of durable goods ticked up 0.3% (-8.8% y/y) during November following increases in two of the prior three months. Shipments now have risen 4.4% from the April low. The improvement has been paced by strong monthly gains in shipments of metals (-16.6% y/y), up 24.2% from the low. Machinery orders rose 2.0% (-20.3% y/y) after touching the cycle low in October. Electrical equipment orders rose 2.2% (-9.1% y/y), about as they did in October.

As was suggested by the October data, the shedding of inventories of durable manufactured goods seems to be ending after nearly a year of correction. Durable goods inventories slipped 0.2% (-11.3% y/y) after no change during October. Declines in inventories lowered the ratio to shipments to its lowest since October of last year.. Unfilled orders fell another 0.7% (-10.9% y/y) led by declines in the transportation sector. Less transportation backlogs rose 0.1% (-11.4% y/y) for the second gain in three months.

The durable goods figures are available in Haver's USECON database.