and Have Stabilized at Just Under 250K/week; Laid-off Workers Quickly Find New Jobs.
Initial claims for unemployment insurance fell by 2,000 to 243,000 in the week ending August 20 from a downward revised 245,000 (was 252,000) in the week ending August 13. The four-week moving average of initial claims, which smooths out some of the volatility, edged up by 2,000 to 247,000 in the week ending August 13 from a downward revised 245,000 (was 250,000) in the previous week. It hit a low of 172K in early April. The insured unemployment rate held steady at a very low 1.0 percent in the week ending August 13 for the seventh straight week.
The total number of people receiving benefits under regular state unemployment insurance programs (continuing claims) fell by 19,000 to 1.415 million in the week ending August 13. The four-week moving average of continuing claims jumped by 13,000 to 1.425 million. Continuing claims have moved higher in the past fourteen weeks but are still close to decades-long lows as unemployed workers leave the program’s rolls, either because their benefits have expired or because they have quickly found a new job.
The labor market remains in good shape as the summer quarter progresses as evidenced by the strong 528K rise in July payroll jobs. The jobs market was as hot as the weather last month! However, the rise in initial claims since early April is only a cool breeze blowing at the hot labor market this summer. The recent rise in initial claims to 247K in the four weeks ending August 13 (from a low of 172K in early-April), and the rise in continuing claims to 1.413 million in the four weeks ending August 6 (from a low of 1.314 million in early June) are a clear sign that layoffs are happening at a growing number of companies and the unemployment rate is close to a low at 3.5 percent, matching its pre-pandemic low point.
Fortunately, most laid-off workers are quickly finding another job as “help wanted” signs continue to appear in store windows and online “windows”. We expect August payroll jobs rose by a solid 300K (reported on 9/2) and the unemployment rate held steady at its pre-pandemic low of 3.5 percent. We forecast that average hourly wages rose by 0.5 percent in August bringing the year-over-year rise up to 5.3 percent. This will be additional evidence that the summer job market remained “hot” and the U.S. economy is NOT in a recession.
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