Initial claims for regular state unemployment insurance jumped by 17,000 for the week ending November 19th, coming in at 240,000. The previous week’s 223,000 was revised up from the initial estimate of 222,000. The latest result is the highest level since August 13th (see first chart). The four-week average of weekly initial claims rose to 226,750, up 5,500 for the week and the highest level since September 3rd (see first chart).
Despite the rise, the level of weekly initial claims for unemployment insurance remains very low by historical comparison. When measured as a percentage of nonfarm payrolls, claims came in at 0.140 percent for October, up from 0.136 in September and above the record low of 0.117 in March (see second chart).
Overall, the data continue to imply a tight labor market. However, continued elevated rates of price increases, an aggressive Fed tightening cycle, and fallout from the Russian invasion of Ukraine remain risks to the economic outlook. Furthermore, job-cut announcements have started to increase recently, raising concern about future labor conditions (see third chart).
The number of ongoing claims for state unemployment programs totaled 1.230 million for the week ending November 5th, a decrease of 33,741 from the prior week (see fourth chart). State continuing claims had inched up recently but remain range bound between 1.2 million and 1.5 million since April (see fourth chart).
The latest results for the combined Federal and state programs put the total number of people claiming benefits in all unemployment programs at 1.256 million for the week ended November 5th, an increase of 50,474 from the prior week.
While the overall low level of initial claims suggests the labor market remains tight, rising job-cut announcements are a concern. The tight labor market is a crucial component of the economy, providing support for consumer spending. However, persistently elevated rates of price increases already weigh on consumer attitudes, and if consumers lose confidence in the labor market, they may significantly reduce spending. The outlook remains highly uncertain.
