- Initial claims for unemployment insurance rose by 9,000 to 224,000 in the week ending January 27.
- The four-week moving average of initial unemployment insurance claims rose modestly to 208,000.
- Continuing claims jumped by 70,000 to 1.898 million in the week ending January 20.
Initial Unemployment Insurance (UI) claims increased by 9,000 in the week ending January 27, rising to 224,000 for a second straight large weekly jump and the highest since mid-November 2023. The four-week moving average of claims, which smooths out some of the weekly volatility in this data set, rose by 5,000 to 208,000. Overall, UI Claims remain low by historical standards. The 200,000 mark appears to be a solid floor for the Initial Claims measure, with the weekly results having bounced upward from that level once reached throughout the second half of 2023 and now again in January 2024.
Continuing claims jumped sharply by 70,000 to 1.898 million in the week ending January 20. This rise puts Continuing Claims back to its highest level since mid-November 2023. The dichotomy between exceptionally low Initial Claims and the recent spike in Continuing Claims suggests that the U.S. labor market is slowing, and that workers who lose their jobs are having a more difficult time finding new work.
Payroll job growth slowed throughout 2023, through remaining firmly positive overall. 2023Q4 saw an average monthly gain of approximately 165,000 jobs per month as compared to 284,000 per month gains in 2022Q4. One concern that emerged from the December 2023 Employment Situation Report from the Bureau of Labor Statistics is that while private industry hiring totaled 216,000 in December 2023, many of those jobs were in Education & Healthcare industries which are closely tied to government spending and often lagging in their reaction to current labor market conditions (i.e., slow to lay off workers). Persistent difficulty in hiring certainly plays a part in those sectors’ job creation regardless of broader hiring trends, but the contrast against barely positive Professional & Business Services hiring (+13,000) on the heels of three consecutive months’ worth of declines provides some context to total employment growth in the U.S. economy as compared to Unemployment Insurance Claims.
PNC expects tomorrow’s January 2024 employment report to show a slightly above market consensus rise in payroll jobs of 200-225K and the unemployment rate remaining at 3.7%. Average hourly wages are expected to rise by 0.3% and tick down to 4.1% Y/Y which is exactly inline the fourth quarter 2023 Employment Cost Index released yesterday.
