1st Time Unemployment Claims Edge Up but Remain Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 230,000 1st time claims for unemployment insurance for the week ended February 10, an INCREASE of 7,000 from the prior week;
  • The number of initial claims for the week ended February 3 was REVISED UP 7,000 to 223,000
  • The four-week moving average of first time claims INCREASED 3,500 to 228,500;
  • Four week moving average represented 0.148 percent of employment, UP from 0.146 percent one week earlier;
  • The number of continued claims –individuals who have been collecting unemployment insurance, reported on a one-week lag – for the week ended February 3 was 1,942,000, UP 15,000 from the previous week’s UPWARDLY REVISED 1,927,000;
  • The four-week moving average of continuing claims DECLINED 5,750 to 1,941,150;

Data Source: Department of Labor 

Trends

  • Since the beginning of the year, the four-week moving average of initial claims for unemployment insurance has dropped 22,250. A drop of almost 9 percent;
  • Year-year the improvement in the four-week moving average is 6.7 percent, underscoring the long-term tightening in the labor market;

Image result for unemployment insurance benefits

The unemployment picture continues to stabilize as the year matures and holidays are in the rear-view mirror (next week’s Presidents’ Day observance notwithstanding). The picture has been one of steady improvement with fewer businesses shedding workers.

Inevitably, this should lead to wage increases as employers struggle to retain workers. The downside, of course is that higher wages can lead to increased inflation, which the Federal Reserve attempts to keep in check.

Forecasting inflation is a perilous chore; if the Fed steps too hard on the brakes it can bring the economy to a screeching halt with inevitable consequences. Wednesday’s Consumer Price Index report showed a 0.5 percent jump in prices in January, the largest since September and a 2.1 percent annual inflation rate, the sixth straight month CPI inflation has matched or exceeded the Fed’s 2.0 percent target.

The economy’s performance supports the view the Federal Open Market Committee will continue and perhaps accelerate its planned interest rate increases.

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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