US weekly jobless claims increase moderately, Haver Analytics estimates
Initial claims for state unemployment benefits rose to a seasonally adjusted 229,140 in the week ending Nov. 1, from 219,520 the previous week, according to Haver Analytics’ calculation. The figure matched estimates from Citigroup, JPMorgan and Nationwide.
The longest federal government shutdown ever recorded also halted the collection, processing and publication of official economic data.
Claims data for New Mexico was not available and assumptions were made along the lines of what the Department of Labor would normally make when the data was not available. Claims data could ease fears fueled by private reports released earlier Thursday showing October job losses and a rise in layoffs announced due to cost cuts and the adoption of artificial intelligence by businesses.
“The demand data stands in stark contrast to this morning’s sharply negative Challenger layoff news and suggests the labor market is not falling off a cliff,” said Oren Klachkin, Nationwide financial markets economist. “It is encouraging to see that the labor market remained stable, albeit soft, in the opening month of the fourth quarter.”
With the government shutdown, the Labor Department’s closely watched employment report will not be released Friday for an unprecedented second consecutive month. However, states continued to collect weekly unemployment claims data and submit them to the Labor Department. Haver Analytics and Wall Street economists take the data and apply seasonal adjustment factors the government has previously released to create weekly damage estimates. ECONOMIC UNCERTAINTY HARMS THE LABOR MARKET
Economists cautioned against giving too much importance to some private sector research, noting that the scope and background were limited. The Bank of America Institute’s analysis of domestic deposit data on Thursday suggested that for now there is “no further slowdown” in the rate of employment growth “which has occurred since the summer.”
The labor market has slowed significantly since the beginning of this year, with economists blaming economic uncertainty, import tariffs and artificial intelligence as the reason for low labor demand. The sharp decline in labor supply due to raids on undocumented immigrants also hurts hiring, which we see most in small business surveys.
The share of small businesses reporting that workforce quality is their top concern rose to a four-year high in October, a survey from the National Federation of Independent Business showed Thursday.
Stable labor market conditions may allow the Federal Reserve to keep interest rates unchanged next month. Last week, the US central bank reduced its benchmark overnight interest rate by another 25 basis points to the range of 3.75-4.00%, and Fed Chairman Jerome Powell said, “A further reduction in the policy rate at the December meeting is not an inevitable outcome.”
The number of people receiving unemployment benefits after the first week of aid, a gauge for hiring, rose to a seasonally adjusted 1.962 million in the week ended Oct. 25, from 1.955 million, JPMorgan estimated. This was broadly in line with calculations from Citigroup and Haver Analytics.
“This likely reflects that hiring remains slow and points to downside risk for October employment data,” said Citigroup economist Gisela Young.
Previously, the Chicago Fed had forecast that the unemployment rate rose from 4.35% in September to 4.36% in October (a four-year high of 4.4% on a rounded basis generally reported by the Bureau of Labor Statistics).
