• Initial claims for unemployment insurance rose by 5,000 to 217,000 in the week ending October 28, the highest since early-September. The four-week moving average of initial unemployment insurance claims edged up by 2,000 to 210,000.
• Continuing claims jumped by 35,000 to 1.818 million in the week ending October 21, the highest since early-April. The four-week moving average jumped by 37,000 to 1.758 million.

Initial Unemployment Insurance (UI) claims rose by 5,000 to 217,000 in the week ending October 28. This is the highest level in the past eight weeks. The four-week moving average of claims, which smooths out some of the weekly volatility in this data, rose by 2,000 to 210,000, the highest since mid-September. 

Striking UAW workers (just recently settled with the Big 3) are not eligible to claim unemployment payments, but other workers may have been laid-off in auto and related companies temporarily during the strike period that lasted almost six weeks. This could also partly help explain why continuing claims jumped by 35,000 to 1.818 million in the week ending October 21, the highest since early April and the four-week moving average of continuing claims rose by 37,000 to 1.758 million, the highest since early-June. The insured unemployment was 1.2 percent in the week ending October 21 for the fourth straight week.  

The BLS estimates that about 28,000 UAW workers were on strike in mid-October when they calculated their employment survey for that month that will be released tomorrow (11/3). We estimate that total payroll jobs rose by close to 180,000 (excluding these strikers) and the unemployment rate slipped to 3.7% in October. We forecast that average hourly earnings rose by 0.3% in October and remained up 4.3% from a year ago, identical to the rise recently announced in the Employment Cost Index (ECI) in the year ending in 3Q’23.

The U.S. labor market continues to advance but is now doing so with gains that are much more consistent with the ongoing anecdotal talk of labor and skills shortages and average wage growth that is now trending above a slower rise in CPI inflation. Fed Chair Jerome Powell emphasized yet again in his presser yesterday (11/1) that there is a better balance in the demand and supply of workers as part of the reason the FOMC held their funds rate steady for a second straight meeting.