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This key labor market indicator hasn't been this strong in years

Akin Oyedele   

This key labor market indicator hasn't been this strong in years
Stock Market1 min read

On Thursday morning, we'll get the best-performing indicator of the US labor market: initial jobless claims.

For a while now, Pantheon Macroeconomics' Ian Shepherdson has been stressing that the weekly print is noisy, particularly with the volatility the end-of-year season brings.

In a note Wednesday ahead of Thursday's latest weekly report, Shepherdson wrote: "We strongly recommend looking at each week's data only in the context of the trend; the weekly observations are more noise than signal. The trend in claims is close to all-time lows as a share of the workforce, and is consistent with very strong payroll gains."

Last Friday, the monthly jobs report showed that nonfarm payrolls in the US grew by 257,000 in January.

But just how good has the claims data been?

This chart, via Alexander Ineichen at Ineichen Research & Management, shows that the 4-week moving average of initial jobless claims is at the lowest level in at least eight years.

Screen Shot 2015 02 11 at 4.46.48 PM

IR&M

Last week's release showed new jobless claims rose by 278,000 for the week ended January 31, compared to an expectation of 290,000.

The consensus for last week's claims in data due Thursday morning is 288,000.

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