1st Time Unemployment Claims Flat Leading to Christmas

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 245,000 1st time claims for unemployment insurance for the week ended December 23, UNCHANGED from the prior week after four straight wee-week declines;
  • The number of initial claims for the week ended December 16 was also UNCHANGED;
  • The four-week moving average of first time claims ROSE 1,750 to 237,750;
  • Four week moving average represented 0.155 percent of employment, UP from 0.153 percent one week earlier;
  • The number of continued claims – reported on a one-week lag – for the week ended December 16 was 1,943,000, UP 7,000 from the previous week;
  • The four-week moving average of continuing claims DECREASED 4,250 to 1,919,750.

Image result for unemployment benefits

Some 245,000 workers found coal in their stockings in the week leading up to Christmas, the Department of Labor reported Thursday with its weekly report on first-time claims for unemployment insurance.

And, the pre-Christmas week wasn’t good for unemployed jobseekers as the number of continued claims rose 7,000 from the previous week indicating employers weren’t dipping into unemployment ranks to add to payrolls.

The weeks leading up to Christmas are historically not a good time for the labor market. Last year, for example, first time claims for unemployment insurance rose a net 13,000 in the two weeks leading to Christmas and continued claims rose 77,000. In 2015, initial claims were up 15,000 and continued claims rose 40,000.

About the only “good news” the labor market received was President Trump signing the tax cut bill. Starting in February, when new withholding tables kick in, salaried workers could start seeing an improvement in take-home pay. Though the higher take home pay will likely be temporary at best, putting more cash in workers’ pockets could flip the polling on the tax bill to being more positive.

Of course, other aspects of the bill – a greater tax break for the top 1 percent, the cap on the deductibility of state and local taxes as a deduction – will also go into effect next week, but will not be felt until April 2019 (conveniently after the November 2081 congressional elections).

As to unemployment insurance claims, we should expect to see greater volatility than normal over the next few weeks as temporary employees hired for end-of-year sales are gradually removed from payrolls. At the same time, holidays will also disrupt the smooth flow of unemployment, despite the application of seasonal adjustments.

All that said, the numbers are providing mixed signals for the Bureau of Labor Statistics’ Employment Situation report for December to be released January 5.

Initial claims for unemployment insurance rose 5,000 from mid-November to mid-December but the four-week moving average of first-time claims fell 4,000 in the same period. The increase would suggest a higher number of unemployed in the January 5 report, but the decrease in the moving average suggests just the opposite.

Continued claims dropped 17,000 from mid-November to mid-December pointing to improved hiring but the four-week moving average of continued claims rose 8,000 in the same period suggesting limited hiring.

 

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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