1st-time Unemployment Insurance Claims Bump Up but Corporate Layoffs Fall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 215,000 1st-time claims for unemployment insurance for the week ended July 27, 2019, an INCREASE of 8,000from the previous week’s upwardly revised 207,000 (from 206,000);
  • The four-week moving average of initial claims DROPPED 1,750 to 211,500;
  • Four -week moving average represented 0.135 percent of employment, DOWN from the previous week’s 0.136 percent;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,699,000 for the week ended July 20, UP 22,000 from the previous week’s UPWARDLY REVISED 1,677,000; (from 1,676,000)
  • The four-week moving average of continued claims ROSE 750 to 1,698,250;
  • Outplacement firm Challenger, Gray and Christmas reported US firms announced plans in June to cut 41,977 jobs, DOWN from 58,577 job cut announcements in May.

Trends:

  • The four-week moving average of initial claims as a percentage of total employment fell for the tenth straight week
  • The four-week moving average of initial claims itself fell for the fourth straight week;
  • In the first six months of 2019, US firms announced plans to cut 330,987 jobs, according to Challenger, Gray & Christmas, up from 245,179 cuts announced in the first six months of 2018.

Data Source: Department of LaborChallenger, Gray & Christmas

Image result for layoffs

Despite an increase in 1st-time claims for unemployment insurance, the weekly report from the Department of Labor continued to show a tight labor market. And, a report on corporate job cut plans suggested the good news is likely to continue, despite the warnings from the Federal Open Market Committee in the form of a cut in interest rates, Wednesday.

Though the week-to-week numbers showed a modest increase, the smoothing four-week moving average showed claims continue to fall.

Initial filings rose in only nine states: District of Columbia, Hawaii, Illinois, Iowa, Kansas, Maine, Nevada, Vermont, and Washington, according to the Department of Labor.

The monthly Challenger report indicated the largest share of job cuts in the beleaguered retail sector with announcements year-to-date of plans to eliminate 53,248 jobs, almost one of every six jobs to be cut. (The Challenger tally includes vacant positions, so not all the announced cuts will result in layoffs. Similarly, plans could change in business conditions improve or deteriorate further. Some of the job cuts could be mitigated by employees opting for early retirement.)

The Labor Department report suggests the Bureau of Labor Statistics Employment Situation release Friday could show a further, albeit modest reduction in the unemployment but stronger job gains.

You can hear Mark Lieberman tomorrow, Friday, August 2, at 8:40 am (EDT) on the Morning Briefing on P.O.T.U.S. radio, Sirius-XM 124. You can hear him on other Fridays at 6:20 am on POTUS’ Morning Report. You can follow him on Twitter at @foxeconomics.

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