Jobless Claims: Sharp Decline

Bottom Line: Jobless claims fell more than expected last week but were nearly in-line with our Nowcast model's forecast. Seasonal adjustments remained heavy but will be subsiding in the coming weeks.  California saw a sharp drop in claims in the week that included the MLK holiday, but there were anomalous increases in Illinois and Florida data.  Together these anomalies should be a wash as adjustments smooth out over the coming weeks.  The trend remains concerning -- the 4-week average is 868k vs. the 13-week average of 810k -- but is starting to turn in the right direction.Our Nowcasting model suggests claims have fallen even further this week, to be reported next Thursday.Jobless Claims FELL by 67k during the week ended January 23th to 847k, compared with market expectations for an increase to 875k. The 4-week average ROSE by 16.3k to 868k and the 13-week average ROSE by 6.8k to 810k.

Continuing Claims FELL by 203k during the week ended January 16th to 4,771k, after the prior week was revised modestly lower from 5,054k to 4,974k. The 4-week average FELL by 107k to 4,998k.
                       
On a non-seasonally adjusted basis, Continuing Claims FELL by 274k to 5,209k during the week ended January 9th.
   
The Insured Jobless Rate FELL by  0.1% to 3.4% during the week ended January 16th. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.