U.S Initial Jobless Claims
The latest data from the United States Department of Labor shows an increase in initial jobless claims, which suggests a slight slowdown in the US economy. However, the labour market remains strong, with job openings rising back above 11 million in December, according to the latest monthly survey by the Labor Department. The January labour market report also showed that the labour market has been consistently more robust than previously thought, with the Labor Department raising its total nonfarm employment estimate by over half a million.
According to the latest data released by the United States Department of Labor, the number of initial jobless claims rose to 196,000, a 13,000 increase from the previous week's reading of 183,000. This figure was higher than the economists' prediction of 190,000, representing an increase from the last week's nine-month low.
Additionally, the data showed that continuing claims, representing the number of people still receiving unemployment benefits, rose by 38,000 week-on-week to 1.688 million. Despite this increase, the average four-week moving initial claims declined from 191,750 to 189,250. This average eliminates the week-to-week volatility in the data and provides a clearer picture of the underlying trend in the labor market.
The advance seasonally adjusted insured unemployment rate also increased, rising from 1.1% to 1.2%, marking an increase of 0.1% from the previous week's unrevised rate.
Breaking down the data by state, the most significant increases in initial claims were seen in Georgia, New York, New Jersey, Oregon, and Wisconsin. At the same time, the most significant decreases were recorded in Kentucky, California, Ohio, Arkansas, and Michigan. This regional variation highlights the impact that local economic conditions can have on the labor market and the ability of workers to find new employment.
The recent data from the United States Department of Labor, which showed an increase in initial jobless claims, brings one of the significant outliers in US economic data more in line with other indications of a slowdown. However, this increase is not likely to change the perception that the labor market remains robust and that there are still plenty of job opportunities for those who have recently lost their jobs.
Job openings in the US rose back above 11 million in December, according to the latest monthly survey by the Labor Department. Furthermore, the January report revealed that the labor market had been consistently more substantial than previously thought. The Labor Department raised its total nonfarm employment estimate by over half a million.
Oxford Economics' Matthew Martin commented on the latest data in a note to clients, saying that the increase in jobless claims is modest and is from a subdued level. He also pointed out that the claims indicate a tight labor market, despite recent headline-grabbing layoffs. Martin believes there is still “plenty of momentum left in the labor market” and that the Federal Reserve is still on track to raise the target range for fed funds again in March.
The Federal Reserve has repeatedly emphasized the exceptional tightness of the labor market since the pandemic started to fade to justify its aggressive policy tightening cycle. This cycle has now taken rates back to 4.75%, and Fed officials continue to indicate that they expect at least one to two more hikes before pausing the process.
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