Remaining at Very Low Levels

• Initial claims for unemployment insurance fell by 3,000 to 192,000 in the week ending February 18. The four-week moving average of initial claims edged up by 1,000 to 191,000.
• Continuing claims plunged by 37,000 in the week ending February 11, to 1.654 million.
• Both initial and continuing claims are extremely low in early 2023 as the labor market remains historically strong.

Initial claims for unemployment insurance fell by 3,000 to 192,000 in the week ending February 18.  Claims for the prior week were unrevised at 195,000. This is the sixth straight week that initial claims have been at or below 195,000. The four-week moving average of claims, which smooths out some of the weekly volatility, edged up by 1,000 to 191,000 in the week ending February 18. This is the lowest the four-week moving average has been since April 2022 and is among the lowest the four-week moving average has been since the data began in the late 1960s.

Continuing claims for unemployment insurance plunged by 37,000 to 1.654 million in the week ending February 11 from a downward revised 1.691 in the previous week. The four-week moving average of continuing claims fell by 3,000 to 1.669 million in the week ending February 11, from a slightly downward revised 1.672 million the previous week, and remains very low on a historical basis. 

Both initial unemployment insurance claims and continuing claims measures remain extremely low and indicate ongoing strength in the labor market. Although company layoff reports are becoming more common, those layoffs are not yet showing up in the unemployment insurance data. Some of this may be timing; if the company offers severance the claims are not counted until the severance expires. But even so, the job market remains remarkably strong. Initial claims are near their lowest levels in since the late 1960s, and continuing claims, after increasing slightly at the end of last year, are now falling and extremely low on a historical basis. 

The US economy added a very strong 517,000 jobs in January, well above expectations. Although there are reasons to think that the January jobs report may have overstated the strength in the labor market, there is no question but that the job market is very strong. Hiring remains robust in early 2023 and businesses continue to have difficulties in finding and retaining workers. The unemployment rate fell to 3.4% in January, the lowest it has been since 1969. Strong earned income growth and the 8.7% rise in social payments in January ($8.9 billion) cleared helped boost consumer spending as retail sales rose by a near-record 3% last month.