Recent government data has revealed noteworthy trends in the US job market, highlighting a decrease in weekly applications for unemployment insurance while simultaneously reporting a spike in continuing claims to levels not seen since November 2021. For the week ending on October 19, the seasonally adjusted number of initial claims fell by 15,000, landing at 227,000, which is notably below the expected consensus estimate of 242,000 gathered from a survey of analysts by Bloomberg.
It's important to note that the previous week’s figures were adjusted upwards by 1,000 claims. The four-week moving average for initial claims stood at 238,500, reflecting an increase of 2,000 claims from the prior average, which was also revised upwards by 250 claims. On a weekly basis, unadjusted claims demonstrated a decrease, dropping by 22,634 and settling at 202,635. Economist Nancy Vanden Houten from Oxford Economics commented on the resilience of the labor market, mentioning that while claims in certain states affected by Hurricane Helene have started to decrease from their recent peaks, the situation in Florida is rather different, as claims have risen, predominantly due to the impacts of Hurricane Milton.
Vanden Houten’s remarks further affirm that the latest reduction in claims aligns closely with pre-hurricane levels, suggesting that the labor market remains strong with minimal layoffs. Continuing claims, which track individuals who have already lost their jobs and are still receiving unemployment benefits, presented a more complex picture.
For the week ending on October 12, the seasonally adjusted number of continuing claims reached nearly 1.9 million - the highest since November 13, 2021. This figure surpassed the Bloomberg consensus estimate of about 1.88 million. Continuing claims increased by 28,000 compared to the previous week’s level, which was revised upwards by 2,000.
Additionally, the four-week moving average for continuing claims was recorded at 1.86 million, reflecting an increase of 17,500 from the week prior. Vanden Houten elaborated that the rise in continued claims can be largely attributed to individuals affected by the hurricanes as well as layoffs linked to the ongoing strike involving Boeing.
The persistence of high continuing claims, alongside the Boeing strike, indicates that payroll employment may experience sluggish growth in October. In the context of the labor market’s fluctuations, Boeing factory employees voted against a newly proposed labor contract on Wednesday, heightening concerns that the current strike, which began in September, may extend into the following month. Geographically, Georgia reported the most significant rise in initial claims for the week ending on October 12, totaling 3,293 claims, followed closely by New York with 2,340 claims and Pennsylvania with 1,379.
Conversely, Michigan experienced the largest drop, with a decline of 7,917 claims, accompanied by decreases in Florida (3,257 claims) and Ohio (2,556 claims)..