Initial claims are down for the fifth week in a row

Initial claims for regular state unemployment insurance fell by 5,000 for the week ending September 10The tenth, comes in at 213,000. Last week 218,000 was revised down from the initial count of 222,000 (see first chart). Claims have fallen for five consecutive weeks and are at their lowest level since May 28The tenth But it remained just above the pre-pandemic average of 212,000 for the 15th consecutive week. When measured as a percentage of nonfarm payrolls, claims came in at 0.160 percent for August, down from 0.171 in July but still above a record low of 0.117 in March (see second chart).

The four-week average fell to 224,000, down 8,000 from the previous week. After showing an ongoing upward trend since the last low in early April, the four-week average has started to trend down again. Overall, the data still points to a tight job market. However, persistent price hikes, the Fed’s violent tightening cycle, and the fallout from Russia’s invasion of Ukraine pose risks to the economic outlook.

The number of ongoing claims for government unemployment programs reached 1.365 million for the week ending August 27The tenth, a decrease of 22533 from the previous week (see the third chart). Continuing government claims were trending higher but are now trending lower again (see third chart).

The latest results for joint federal and private programs put the total number of people claiming benefits in all unemployment programs at 1.391 million for the week ending August 27.The tenth, a decrease of 23,420 from the previous week. The latest result is the 29th week in a row below 2 million.

While the overall low level of claims combined with the large number of open jobs indicates that the labor market remains strong, both metrics have recently shown some periods of weakness. A tight labor market is an important component of the economy, providing support for consumer spending. However, persistently high rates of prices do affect the attitudes of consumers, and if consumers lose confidence in the labor market, they may significantly reduce spending. The prospects remain highly uncertain.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 after more than 25 years researching financial and economic markets on Wall Street. Previously, Bob was Head of Global Equity Strategy for Brown Brothers Harriman, where he developed an equity investment strategy that combines top-down macro analysis with upward fundamentals.

Prior to BBH, Bob was Chief Equity Analyst at State Street Global Markets, Chief Economist at Prudential Equity Group and Chief Economist and Financial Markets Analyst at Citicorp Investment Services. Bob holds an MA in Economics from Fordham University and a BA in Business Administration from Lehigh University.

Get notified of new articles from Robert Hughes and AIER.

Related Posts

Leave a Reply

Your email address will not be published.