1st Time and Continued Unemployment Claims Fall Again

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 225,000 1st time claims for unemployment insurance for the week ended December 9, DOWN 11,000 from the prior week, the fourth straight week-week decline;
  • The number of initial claims for the week ended December 2 was UNCHANGED at 236,000
  • The four-week moving average of first time claims DROPPED 6,750 to 234,750;
  • Four week moving average represented 0.154 percent of employment, down from 0.157 percent one week earlier;
  • The number of continued claims – reported on a one-week lag – for the week ended December 12 was 1,886,000, DOWN 27,000 from the previous week;
  • The four-week moving average of continuing claims INCREASED 4,500 to 1,918,500.

If employers aren’t hiring for the holiday season they’re also not laying off workers at least according to the weekly report of first time claims for unemployment insurance reported by the Department of Labor.

Image result for unemployment insurance

Initial claims fell for the fourth consecutive week and have now fallen 10.7 percent since mid-November.

Continued claims, the tally of those who had been and remain on unemployment insurance rolls dropped 27,000 (following a 47,000 plunge a week earlier) to 1.84 million.

While both numbers are leading indicators of the strength of the labor market, the count of continued claims is perhaps a better indicator, suggesting favorable hiring trends. Coupled with last week’s Employment Situation report for November and the Job Openings and Labor Turnover Survey released earlier this week, the labor market data remains strong, indicating newly laid off workers may not be out of work for long.

Indeed “re-entrants” to the labor force – those who had given up looking for work – represented 30.6 percent of the unemployed in November, the highest share since March 2016. And, the JOLTS data showed there were almost as many job openings (5,996,000) as unemployed (6,242,000) at the end of October (the last published data).

The data provided further support for the decision by the Federal Open Market Committee Wednesday to boost the target federal funds rate – the interest rate banks charge each other for overnight borrowing – by 25 basis points (a quarter of a percentage point). The vote by the FOMC brought the rate to a range of 1.25 percent t0 1.5 percent.

The FOMC action, which had been telegraphed, is designed to prevent the nation’s economy from overheating, although some observers are suggesting an economic bubble is forming.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

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