Initial claims for regular state unemployment insurance increased by 4,000 for the week ending Dec. 3Research and development, coming in at 230,000. 226,000 last week revised up from the initial estimate of 225,000 (see first chart). Weekly Initial Claims have risen in seven of the past twelve weeks.
The average weekly claims over four weeks rose to 230,000, up 1,000 from the week. It was the eighth increase in the past 10 weeks and the highest level since Sept. 3Research and development (See first chart).
When measured as a percentage of nonfarm payrolls, claims came in at 0.145 percent for November, up from 0.140 in October and above the record low of 0.117 in March (see chart two). While the level of weekly initial claims for unemployment insurance remains very low by historical comparison, the upside is a concern.
Job cut announcements have increased recently adding to the concern about the upside in initial claims. Job cut announcements jumped to 76,835 in November versus 33,843 in October, the highest level since January (see chart three). While the data continues to point to a tight labor market, continued rate hikes, aggressive Fed tightening cycle, and fallout from Russia’s invasion of Ukraine continue to pose risks to the economic outlook.
The number of ongoing claims for state unemployment programs was 1.258 million for the week ending November 19The tenth, a decrease of 79,919 from the previous week (see chart four). Continuing state claims remain in the 1.2 million and 1.5 million range (see chart four).
The latest results for state and federal programs put the total number of people claiming benefits across all unemployment programs at 1.284 million for the week ended November 19.The tentha decrease of 83,896 from the previous week.
While the overall low level of initial claims indicates that the labor market remains tight, an uptrend in claims and a rise in job cut announcements are concerns. A tight labor market is an important component of the economy, providing support for consumer spending. However, ever-rising high price rates are already affecting consumers’ expectations for the future, and if consumers lose confidence in the labor market, they may significantly reduce spending. The outlook remains highly uncertain.
Robert Hughes
Robert Hughes joined AIER in 2013 after more than 25 years in financial and economic markets research on Wall Street. Bob was previously Head of Global Equity Strategy for Brown Brothers Harriman, where he developed an equity investment strategy that combined top-down macro analysis with bullish fundamentals.
Prior to BBH, Bob served as chief equity analyst at State Street Global Markets, chief economic analyst 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.
