1st Time Unemployment Claims Show Modest Dip; Longer Trends Not Encouraging

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 231,000 1st time claims for unemployment insurance for the week ended December 1, a DECREASE of 4.000 from the prior week’s unrevised report
  • The four-week moving average of first-time claims ROSE 4,250 to 228,000;
  • Four-week moving average represented 0.146 percent of employment, UP from 0.143 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,631,000 for the week ended November24, DOWN 74,000 from the previous week’s downwardly REVISED 1,705,000 (from 1,710,000);
  • The four-week moving average of continued claims FELL 250 to 1,667,000.

Trends:

  • The drop in first-time claims was the first in four weeks;
  • The four-week moving average of first-time claims increased for the fourth straight week, the eighth time in the last 10 weeks, to its highest level since April
  • The four-week moving average of 1,667,000 continued claims is the highest level for this average in ten weeks.

Data Source: Department of Labor

Image result for labor market

The labor market has taken on a decidedly different appearance in the last few weeks as noted by Thursday’s report on first-time unemployment insurance claims.

Initial claims, though down in the last week, have increased in three of the last four weeks and substantially, up 3 percent 2 percent and 4 percent before dropping by 2 percent. From mid-October to mid-November, claims rose 15,000, itself a jump of 7 percent and the largest mid-month to mid-month increase in a year.

The four-week moving average of first time claims also increased from mid-October to mid-November, up 9,000 or 4.3 percent to the highest since September 2017.

The increases don’t suggest alarm but taken with the higher levels of continued claims, a surrogate for hiring (more continued claims suggest fewer individuals getting job offers as a way to get off unemployment rolls) and there could be cause for concern.

Those concerns were noted in forecasts for tomorrow’s employment situation report. The median forecast is for 190,000 new payroll jobs, down from the 250,000 new jobs reported for October and below the average number of new jobs each month this year: 213,00

Though the unemployment rate is expected to remain at 3.7 percent, the year-year growth in average hourly earnings is also expected to remain at October 3.0 percent suggesting the tighter labor market is not pushing wages up.

We can expect retail hiring to show an increase in November as stores ramp up for holiday shoppers but given that retail is the lowest paying job sector, an increase in those jobs would likely adversely affect the average growth.

You can hear Mark Lieberman tomorrow (Friday, December 7) at 8:45 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124.

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