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Increase in Weekly US Jobless Claims Exceeds Predictions

Increase in Weekly US Jobless Claims Exceeds Predictions

Despite a steady four-week average and varied state trends, the sudden increase in unemployment claims suggests a changing job market.

Highlights

  •  The number of claims has risen to 218,000, surpassing predictions.
  • Over the past four weeks, the average has decreased slightly, despite the weekly increase.
  • Various state data indicate a cautious and uncertain bearish perspective.  

Increase in New Unemployment Claims

Recent data on unemployment indicates a significant rise in new claims, signaling a change in the job market's direction. For the week ending December 23, seasonally adjusted initial claims surged to 218,000, marking a 12,000 increase from the prior week's revised level, surpassing the market's anticipated 211,000. The previous week's level was revised to 206,000, reflecting a minor uptick of 1,000.

Trends in Four-Week Averages and Unemployment Rates

Despite the weekly claims increase, the four-week moving average, a more stable metric, slightly decreased to 212,000, down by 250 from the prior week's revised average. The insured unemployment rate saw a slight uptick to 1.3% for the week ending December 16, a marginal increase from the revised rate of the previous week. During the same period, the seasonally adjusted insured unemployment rose to 1,875,000, a 14,000 increase from the prior week's revised level.

Unadjusted Figures and Year-over-Year Analysis

Unadjusted data for the week ending December 23 revealed 272,610 initial claims, marking a 13.1% increase from the previous week, surpassing the expected seasonal rise. Comparatively, the unadjusted insured unemployment rate remained steady at 1.2%, while the total volume of insured unemployment in state programs experienced a slight decrease, falling by 9,236 to 1,826,178. In a year-over-year comparison, the total number of continued weeks claimed for benefits saw a moderate increase, totaling 1,863,707 for the week ending December 9, 2023.

State-Specific Patterns and Future Prospects

States with the highest insured unemployment rates, such as New Jersey, Alaska, and California, reflected varied economic pressures. Notably, Ohio, Oklahoma, and Michigan saw substantial increases in initial claims, whereas California and Georgia experienced notable decreases.

Amid these mixed signals, the immediate outlook remains cautiously bearish. The surge in initial claims suggests a potential softening in the labor market, although the overall impact is yet to be fully understood. Investors and traders should vigilantly monitor upcoming data releases for clearer insights into labor market trends and their potential impact on broader economic indicators.  

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