Weekly Initial Claims Hit Fourteen-Week High

Initial claims for regular state unemployment insurance jumped 17,000 in the week ending Nov. 19.thgoing up to 240,000. The previous week’s 223,000 was revised upward from the initial estimate of 222,000. The latest result is the highest level since August 13.th (see first diagram). The four-week average weekly initial hits rose to 226,750, up 5,500 for the week and the highest level since Sept. 3.rd (see first diagram).

Despite the increase, weekly initial jobless claims remain very low compared to previous periods. Measured as a percentage of nonfarm payrolls, applications were 0.140% in October, up from 0.136% in September and above the record low of 0.117% in March (see second chart).

Overall, the data continues to show tensions in the labor market. However, continued elevated price growth, an aggressive Fed tightening cycle and the fallout from the Russian invasion of Ukraine remain risks to the economic outlook. In addition, job cut announcements have increased recently, raising concerns about future working conditions (see graph three).

The number of current applications for participation in state unemployment programs for the week ended November 5 was 1,230 million.th, which is 33,741 less than the previous week (see fourth chart). The state’s continuous claims have increased recently but have remained in the range of 1.2 million to 1.5 million since April (see chart four).

According to the latest results from the combined federal and state programs, the total number of people claiming benefits from all unemployment programs was 1.256 million people for the week ended November 5.thwhich is 50,474 more than the previous week.

While the overall low level of initial announcements suggests that the labor market remains tight, rising announcements of job cuts are a concern. A tight labor market is a critical component of the economy supporting consumer spending. However, ever-increasing rates of price growth are already affecting consumer attitudes, and if consumers lose confidence in the labor market, they can cut spending significantly. The outlook remains highly uncertain.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 after over 25 years of economic and financial market research on Wall Street. Bob previously led the Global Equity Strategy division of Brown Brothers Harriman, where he developed an equity investment strategy that combines top-down macro analysis with bottom-up fundamentals.

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

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