If I had one piece of economic data to describe conditions across the American economy, it would be the 13-week moving average of initial jobless claims.
Initial claims, when smoothed out over three months to account for noise in the data, continue to signal a remarkably stable domestic labor market despite a lower pace of hiring.
Given the challenges in the Bureau of Labor Statistics’ new birth-death model, which estimates job creation by new businesses and job losses from those that have closed, we expect month-to-month volatility to continue in initial claims.
We are paying more attention to the weekly high frequency data in a way we have not since the early stages of the pandemic.
Those who have been around the business that supports fixed-income trading have followed the 13-week moving average. That data will most likely gain more relevance as we move into another noisy period in the labor market.
When we get the initial claims through the week of April 18 this morning, we anticipate a move from the 207,000 posted previously to near the current 13-week moving average of 213,000, which will once again reaffirm the low-fire, low-hire narrative across the U.S. economy.
