This week’s jobless claims reflect a little more complex scenario than usual, because the hurricane effects have disappeared from initial claims and their four week average, but likely are affecting continued claims, and are also likely to have a negative impact for the unemployment rate in the next jobs report.To the numbers: initial claims declined -6,000 to 213,000, the lowest since April. The four week moving average declined -3,750 to 217,750, the lowest since the beginning of May. With the typical one week lag, continuing claims rose 36,000 to 1.908 million, the highest since November 2021:(Click on image to enlarge)
As is usual, the YoY% numbers are more important for forecasting purposes, and there initial claims were unchanged, while the four week moving average was down -2.3%. Continuing claims were higher by 6.3%:(Click on image to enlarge)
Ordinarily the YoY% increase in continuing claims would be somewhat concerning. But let’s take a look at the NSA numbers for North Carolina (blue, left scale) and the the rest of the US (red, right scale):(Click on image to enlarge)
Pretty obvious what is happening, no?It becomes more obvious when we calculate the YoY% change in continuing claims ex-North Carolina:(Click on image to enlarge)
They are up only 3.3%, in line with their readings for the past 7 months.In short, once we account for the hurricane effects on continued claims, the result including initial claims is net positive.Finally, let’s do the usual update on the forecast for the unemployment rate, looking at the YoY% changes:(Click on image to enlarge)
Jobless claims suggest that the unemployment rate should be less than 10% higher than it was a year ago. This is a “percent of a percent,” which ordinarily would mean that since last November the unemployment rate was 3.7%, next month we should expect a number no higher than 4.1%.I don’t think that analysis will work when the November jobs report comes out. Not only will we still have the effects of immigration have been putting upward pressure on this number, but so will the continuing unemployment caused by the hurricanes, as we have seen from the analysis of continuing claims above. In short, be prepared for a negative surprise as to the unemployment rate in the next jobs report.More By This Author:What To Look For If Housing Construction Does Forecast A Recession Leading Housing Construction Data Stabilizes, While Units Under Construction Continue Free-Fall Whither Housing? A Look At Interest Rate And Inflationary Considerations
Initial Claims Are Positive, While Hurricane-adjusted Continued Claims Are Neutral
