Unemployment insurance Claims Fall Back but Hiring Backlog Persists

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 204,000 1st-time claims for unemployment insurance for the week ended January 11, 2020, a DECLINE of 10,000from the previous week’s unrevised 214,000;
  • The four-week moving average of initial claims FELL 7,750 to 224,000;
  • Four-week moving average represented 0.136 percent of employment, DOWN from 0.141 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,767,000 for the week ended January 4, DOWN 37,000 from the previous week’s UPWARDLY REVISED 1,804,000 (from 1,803,000)
  • The four-week moving average of continued claims ROSE 10,500 to 1,755,500.

Trends:

  • The number of first-time claims for unemployment insurance fell for the fifth straight week for the first time since last March-April;
  • The four-week moving average of continued claims for unemployment insurance rose for the fifth straight week and has increased for 13 of the last 15 weeks;
  • The four-week moving average of continued claims rose to its highest level since last March

Data Source: Department of Labor

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The pathway from employment to a new job remains clogged according to data from the Labor Department on continued claims for unemployment insurance, suggesting a continued mismatch between available jobs and the newly unemployed.

The increase in the four-week moving average of continued claims represents the backlog in the number of individuals unable to escape from unemployment rolls by getting a new job. Indeed, the data are consistent with statistics in the monthly Employment Situation showing a steady decline in the number of “re-entrants” to the labor force (from unemployment rolls). Since January, the number of re-entrants to the labor force has dropped almost 16 percent and last month represented 28.9 percent of the total number of persons unemployed, down from 31.3 percent a year earlier.

The data suggest strongly unemployed individuals are unable to requalify for the jobs they once had.

The statistics are like those in the monthly Job Openings and Labor Turnover Survey which have been showing gaps between job openings and hires in the same industries.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

New Unemployment Insurance Claims Drop but Continued Claims Shoot Up

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 214,000 1st-time claims for unemployment insurance for the week ended January 4, 2020, a DECREASE of9,000from the previous week’s upwardly revised 223,000 (from 222000);
  • The four-week moving average of initial claims FELL 9,500 to 224000;
  • Four-week moving average represented 0.144 percent of employment, UP from 0.142 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,803,000 for the week ended December 28, UP 75,000 from the previous week’s UNREVISED 1,728,000;
  • The four-week moving average of continued claims ROSE 33,000 to 1,744,750.

Trends:

  • The number of initial claims for unemployment fell for the fourth straight week for the first time since March-April last year;
  • The four-week moving average of first-time unemployment insurance claims fell for the first time in five weeks;
  • The week-week increase in continued unemployment insurance claims was the largest since the week ended November 28, 2015 when continued claims rose 80,000.

Data Source: Department of Labor

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First-time claims for unemployment insurance fell back for the fourth straight week, the Labor Department reported Thursday, returning to the recent normal range.

But, the lasting nature of those who lost their jobs in the preceding four weeks showed up in continued claims which jumped 75,000 to the highest level since April 2018.

The job losses came largely in California in the wake of wildfires ravaging that state.

The Labor Department report will have no impact on the Employment Situation release from the Bureau of Labor Statistics due Friday.

That report is expected to continue to show strength. The monthly report from payroll processing firm ADP showed an increase of 202,000 private sector jobs in December. At the same time, the government has begun adding Census workers which should show up as a jump in federal employment in December.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

Unemployment Insurance Claims Slide but Remain High

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 234,000 1st-time claims for unemployment insurance for the week ended December 14, 2019, a DECREASE of18,000from the previous week’s unrevised 252,000;
  • The four-week moving average of initial claims ROSE 1,500 to 225,500;
  • Four-week moving average represented 0.142 percent of employment, UP from 0.141 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,722,000 for the week ended December 7, UP 51,000 from the previous week’s UPWARDLY REVISED 1,671,000 (from 1,667,000)
  • The four-week moving average of continued claims ROSE 6,250 to 1,683,500.

Trends:

  • The surge in the number of continued claims was the largest the week ended February 16 when continued claims rose 54,000;
  • According to the Labor Department, four states saw an increase of first-time of more than 8,000 for the week ended December 7
  • The four-week moving average of initial claims rose to its highest level since February.

Data Source: Department of Labor

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First-time claims for unemployment insurance fell back 18,000 for the week ended December 14, the Labor Department reported Thursday.

And using state reports received on a one-week lag, the Labor Department attributed the 51,000 increase in first time claims for the week ended December 7 to California wildfires and layoffs in the transportation and warehousing sector, a product of higher tariffs which tamped down imports.

The higher number of initial claims hints at a possible increase in the nation’s unemployment rate when the Bureau of Labor Statistics’ Employment Situation Report for December is released January 10. From mid-November to mid-December, the number of first-time claims rose 6,000 and the four-week moving average of initial claims increased 4,250. Both measures also increased from mid-November to mid-December.

The relatively high level of first-time claims for the week ended December 14 is particularly worrisome. While the data for the previous week was likely impacted by the often-extended Thanksgiving Day holiday, there was no calendar interference in the subsequent week.

Weekly claims data are highly volatile in the best of times, even more so in a week which reflected a later-than-usual Thanksgiving holiday. During holiday periods displaced workers can file claims electronically even as government workers who process them may take vacation.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

Existing Home Sales Slip in November

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales – FELL 1.7 percent, 90,000, in November to a seasonally adjusted annual sales rate of 5.35 million;
  • Sales pace for October was revised DOWN 20,000 to 5.44 million;
  • Median price of an existing single-family home ROSE 0.1 percent, $300, to $271,300;
  • Year-year the median price is up 5.4 percent or $13,900;
  • Number of homes available for sale DECLINED 130,000 to 1.64 million;
  • The months’ supply of homes for sale in November FELL to 3.7 months from 3.9 months.

Trends:

  • Year-year sales were UP 2.7 percent, the fifth consecutive month of year-to-year increases after 16 months of year-year declines;
  • The median price of an existing single-family home ROSE for the first time in five months;
  • The inventory of homes for sale fell for the fifth straight month, the longest stretch of monthly declines since the number of homes for sale fell for six straight months from July through December last year.

Data Source: National Association of Realtors (NAR)

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Despite near record low mortgage rates and stable prices, existing home sales slipped 1.7 percent in November, underscoring a difficult year for existing home sales.

The dip in home prices has trimmed prices of existing homes leading many would-be sellers to take their homes off the market, reducing choices for buyers, trimming the average sales pace to 5.36 million in the first 11 months of 2018 to 5.23 in the first 11 months this year.

The number of homes for sale shrank to 1.64 million in November, the lowest level since 1.63 million in February which was followed in March by a 4.9 percent drop in sales. The 130,000 drop in the inventory of homes for sale was the largest single-month decline since last December when the number of homes on the market fell 210,000.

As if to replace the shrinking inventory of existing homes for sale, the number of permits and starts for single-family homes increased in November, the government reported earlier this week. And, with the increase in homebuilding, the housing market, reflecting builder sentiment, rose sharply in December.

Homebuilding – that is new homes sold – represents about 10 percent of the home sales market but has a disproportionate impact on the economy, reflecting as it does construction labor, and the purchase of building material and supplies.

Also, according to the National Association of Home Builders, the buyer of a new home spends an average of $9,500 on furnishing during the first year of homeownership compared with $6,500 spent by the buyer of an existing home.

The decline in existing home sales came despite two straight months – August and September –in which the NAR’s pending home sales index (reflecting contracts for sale) rose. The pending home sales index fell on October suggesting another dip in sales (closings) in December.

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

Housing Permits, Starts Hit 12-year High in November

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Home-building activity, measured by housing permits and starts ROSE in November with both hitting a post-Recession high
  • The seasonally adjusted annual rate of total starts ROSE 3.2 percent or 32,000 to1.37 million;
  • Starts for new single-family homes ROSE 2.0 percent or 18,000 to 936,000;
  • The rate of total housing completions ROSE 117,000 or 10.3 percent in October;
  • The SAAR of single-family completions ROSE 4.5 percent or 39,000.

Trends:

  • Total permit activity for November rose to the highest level since May 2007;
  • Single-family permit activity rose to its highest level since August 2007;
  • Single-family housing starts were up year-year for the sixth straight month.

 Data Source: Census Bureau and Department of Housing and Urban Development

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Single- and multi-family homebuilding moved higher in November, reinforcing solid builder confidence levels according to the Census Bureau and Department of Housing and Urban Development.

The HUD-Census report showed housing activity reaching new post-recession highs, suggesting a comeback for housing. The home-building data reinforces strong builder confidence as suggested by the National Home Builders Association’s housing market index. That index rose to a 20-year high this month the NAHB reported Monday.

The rebound in builder sentiment suggests a recovery in the housing sector. New home sales which slipped slightly in October (the most recent data) are nonetheless up a solid 31.6 percent year over year due in large measure to low interest rates and falling prices. The median price of a new single-family home in October was $316,700m a drop of $11,600 or 3.5 percent from a year ago.  (The report on November new home sales and prices is scheduled for release next Monday.)

The uptick in both permits and starts comes as good news for construction employment which has seen slow growth in the last few months. The number of residential construction jobs, according to the Bureau of Labor Statistics grown just 0.8 percent since the beginning of the year compared with 3.8 percent growth in the first 11 months last year.

The increase in total permits was due largely to an increase in multi-family activity which accounted for 14,000 units compared with 7,000 single-family homes.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Builder Confidence Surges in December

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index JUMPED five points in December to 76 (out of 100);
  • All three components of the HMI ROSE in December;
  • The outlook for sales in the near term ROSE seven points to 84
  • The outlook for sales six months out ROSE one point to 79;
  • Buyer traffic IMPROVED four points to 58;
  • Each of the three components was revised upward by one point for November;
  • Regionally, the index IMPROVED in three of the four census region, slipping only in the Northeast from 63 to a still sold 61.

Trends:

  • The total HMI to its highest level since June 1977 (77)
  • The 7-point month-month increase in current sales was the largest one-month jump since July 2015;
  • The outlook for sales six months out is at its highest level since March 2018;
  • Buyer traffic is at its highest level since December 2017;

Data Source: National Association of Home Builders (NAHB)

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New home sales may be treading water but as far as home builders are concerned, they’re setting records.

Builder confidence rose to its highest level in 20 years in early December (based on sentiment at the end of November) as the outlook for current sales, for sales six months forward and buyer traffic all rose.

The index has been over the break-even point, 50, for more than five years.

The increase in confidence came despite the most recent data for new home sales which showed a slight dip in the seasonally adjust annualized rate of sales, falling in October (the most recent data) to 733,000 from 738,000. The sales pace has, despite the October data, been inching up this year, averaging 683,000 for the first ten months, up almost 9.5 percent from 624,000 in the first 10 months of 2018.

Not only have falling mortgage rates resulted in the sales boost, but prices too have been slipping. The median price of a new single-family home in October was $316,7000, down 3.5 percent from October 2018. In October, the rate on a 30-year fixed-rate loan averaged 3.69 percent (…and in November that rate averaged 3.70 percent).

Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @ foxeconomics.

Unemployment insurance Claims Jump to 2-plus Year High

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 252,000 1st-time claims for unemployment insurance for the week ended December 7, 2019, an INCREASE of49,000from the previous week’s unrevised 203,000;
  • The four-week moving average of initial claims ROSE 6,250 to 224,000;
  • Four-week moving average represented 0.141 percent of employment, UP from 0.139 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,667,000 for the week ended November 30, DOWN 31,000 from the previous week’s UPWARDLY REVISED 1,698,000 (from 1,693,000)
  • The four-week moving average of continued claims FELL 6,250 to 1,676,000.

Trends:

  • The surge in the number of first-time claims was the largest since the number of first-time claims soared 61,000 for the week ended August 28, 2017
  • The number of first-time claims rose to the highest level since the week ended September 25, 2017;
  • The four-week moving average of initial claims rose to its highest since May;

Data Source: Department of Labor

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Just one week after initial claims for unemployment insurance fell to the lowest level since April, first-time claims soared to the highest reading in more than two years, the Labor Department reported Thursday.

There were no external factors such as storms or labor unrest which might have led to the surge which was likely more related to the calendar. Weekly claims data are highly volatile in the best of times, even more so this week which reflected a later-than-usual Thanksgiving holiday. During holiday periods displaced workers can file claims electronically even as government workers who process them may take vacation.

Claim filings this year have been rocked by weather and the California wildfires which led to temporary jumps in the readings followed closely by a sizable decline suggesting no long-term negative labor trend. Even continued claims – which reflect previous claimants who remain on unemployment rolls—have not shown any sustained increase which would suggest difficulty in securing new employment.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

Unemployment insurance Claims Drop to 7-Month Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 203,000 1st-time claims for unemployment insurance for the week ended November 30, 2019, a DECREASE of10,000from the previous week’s unrevised 213,000;
  • The four-week moving average of initial claims FELL 2,000 to 217,750;
  • Four-week moving average represented 0.139 percent of employment, DOWN from 0.140 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,693,000 for the week ended November 23, UP 51,000 from the previous week’s UPWARDLY REVISED 1,642,000 (from 1,640,000)
  • The four-week moving average of continued claims was UNCHANGED at 1,681,000.

Trends:

  • The number of first-time claims fell for the second straight week. The two-week drop of 25,000 was the largest two-week decline since initial claims fell 40,000 in the two weeks ended September 16, 2017;
  • The number of first-time claims fell to the lowest level since April (193,000);
  • The 51,000 jump in continued claims was the largest since claims jumped 54,000 in February of this year;
  • The four-week moving average of continued claims has dropped only once in the last nine weeks.

Data Source: Department of Labor

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Initial claims for unemployment insurance fell to the lowest level since April for the week ended November 30, the Labor Department reported Thursday.

While certainly a positive sign for the cranky labor market, the numbers were likely affected by the Thanksgiving holiday, with government bureaucrats who process claims enjoying a four-day weekend. Even as claims may have been filed electronically, final processing would have been delayed.

The report of initial claims will have no impact on the Employment Situation release scheduled for Friday but mid-month comparisons, along with the monthly report from payroll processor ADP suggest the jobs report for November may show some weakness.

From mid-October to mid-November, the number of initial claims rose 10,000 and the four-week moving average of first-time claims rose 5,500. Both mid-month measures increased for the first time in more than seven years when it resulted in a sharp drop in the number of people employed (although the unemployment rate remained unchanged).

The mid-month claims data as well are complicated by the recently settled UAW strike which led to a sharp jump in unemployment insurance claims in mid-November.

Forecasters are braced for relatively weak jobs numbers on the heels of Wednesday’s ADP report which showed an increase of 67,000 private-sector jobs in November compared with a monthly average of 160,000 for the first 10 months of the year.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

Pending Home Sales Index Falls Despite Lower Mortgage Rates

Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Association of Realtors’ Pending Home Sales Index (PHSI) FELL 1.7 percentage points in October to 106.7;
  • The September PHSI was revised down to 108.6 from 108.7
  • Year-year the index ROSE 4.5 percentage points.

Trends:

  • The PHSI decline was only the fourth this year;
  • Year-year the Index has risen three months in a row for the first time since July 2016-March 2017.

Data Source: National Association of Realtors (NAR

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With mortgage rates remaining low the National Association of Realtors Pending Home Sales fell in October for just the second time in the last six months.

The NAR’s report came as Freddie Mac ‘s weekly mortgage survey showed the average rate for a 30-year fixed rate loan rose to 3.69 percent from 3.61 percent in September, still at historically low levels.

The dip in the index – which measures contracts for sale, not closings — tracked the government’s new home sales report – which also measures contracts for sale – of a 0.7 percent decline in new home sales in October.

And like the new home sales report, the PHSI is up sharply from 2018. The October 2018 pending home sales index was 102.7. The pace of new home sales in October, according to the Census Bureau Department of Housing and Urban Development report, was 31.5 percent higher than October 2018.

Sales contracts for existing homes fell in three of the four Census regions in October, improving in only the Northeast while the PHSI was up in the Midwest and West in October but down in the Northeast and South.

The dip in the PHSI in October pointed to a downturn in closed sales in December. When the PHSI rose 1.4 percentage points in August, completed sales, closings, rose 1.9 percent in October.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

Continued Unemployment Insurance Claims Fall to 46-Year Low;

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 213,000 1st-time claims for unemployment insurance for the week ended November 23, 2019, a DECREASE of15,000from the previous week’s upwardly revised 228,000 (from 227,000);
  • The four-week moving average of initial claims FELL 1.500 to 219,750;
  • Four-week moving average represented 0.140 percent of employment, UP from 0.138 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,640,000 for the week ended November 16, DOWN 57,000 from the previous week’s UPWARDLY REVISED 1,697,000 (from 1,695,000)
  • The four-week moving average of continued claims FELL to 1,680,500 from 1,693,500.

Trends:

  • The week-week decline in first-time claims for unemployment insurance was the largest since the week ended May 11;
  • The level of continued claims was the lowest since the week ended August 4, 1973, just over 46 years ago;
  • The decline in continued claims for unemployment insurance was the largest since the week ended April 6;
  • The four-week moving average of continued claims rose for the first time in eight weeks.

Data Source: Department of Labor

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First-time claims fell sharply in the week ended November 23, but the “headline” shifted to continued claims which dropped to a 46-year low.

Continued claims counts individuals who had previously filed claims and continue to receive them. They are often seen as a surrogate for hiring since getting a job is one of only three ways to stop collecting unemployment benefits – along with benefits expiring or becoming ineligible for payments.

The dramatic drop in continued claims suggests the Employment Situation release December 6 could include a surprise boost in payrolls. From mid-October to mid-November, continued claims for unemployment insurance fell 43,000 but the four-week moving average of continued claims rose 3,000, dampening expectations somewhat.

One of the factors contributing to the prior weeks’ increases in first-time unemployment claims was the wildfires in California but those forced layoffs appear to have abated just as recent rains have slowed the spread of fires.

According to the Labor Department, an industry review of initial claims (on a one-week lag) suggested new concerns in the construction sector with the four states reporting an increase of 1,000 or more first time claims – Illinois, Louisiana, Michigan and Minnesota – all citing higher layoffs in the construction sector.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.