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First Cut: Initial jobless claims up slightly in October 12 week, still holding at modest levels

Initial jobless claims for the week ended October 12 rose 4,000 to 210,000 after an unrevised 210,000 in the prior week. The four-week moving average rose 1,000 to 214,750. Levels remain at modest levels consistent with a strong labor market.

In spite of the UAW strike passing the five-week mark, there has been no surge in layoffs that might be expected as businesses who service and supply the auto industry are forced into idleness. The answer may have been in the October 17 release of the Fed’s Beige Book where report suggested that businesses are reluctant to layoff skilled workers out of a concern they will be permanently lost in a hot labor market. It said, “A number of Districts reported that manufacturers reduced their headcounts because orders were soft. However, some firms were more concerned about the longer-term availability of workers and subsequently chose to reduce hours rather than staff levels.”

The Labor Department reported no special factor and no states estimated claims.

The insured rate of unemployment in the October 5 held at 1.2% for second week after two previous weeks at a record low of 1.1%. Essentially, the rate has been unchanged since May 2018 with very little slack in available workers. Continuing claims fell 10,000 to 1.679 million, reflecting only normal week-to-week fluctuations and still at a level that points to relatively few workers remaining on the rolls.

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