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First Cut: Initial jobless claims down in November 2 week, underlying trend steady and modest

Initial jobless claims fell 8,000 in the November 2 week to 211,000 after a slightly revised 219,000 in the October 26 week (previously 218,000). The four-week moving average was essentially unchanged, rising only 250 to 215,250.

The Labor Department cited no special factors and claims were estimated for one state — Kentucky. The presence of a teachers strike in Chicago has not resulted in an influx of new claims. Wildfires in California may lead to come increases in claims. In the October 26 week, California reported an increase of 1,890 in new filings in service industries. In the same week there were large numbers of layoffs that appear to be in manufacturing that could be a late result of the UAW strike at GM, but also the generally softer conditions in the factory sector. Georgia (1,824), Virginia (1,669), and Ohio (1,106) all indicated that there were layoffs in manufacturing. Some of these layoffs could be short-lived if they were strike-related since the union and GM agreed on a new contract in that week.

Continuing claims in the October 26 week were down 3,000 to 1.689 million a negligible decrease from a relatively low level. The insured rate of unemployment held at 1.2% were it has been since May 2018 with only the briefest of interruptions to the downside.

Claims normally start to increase in November and into December as many businesses adjust payrolls and cut costs before the new year. Even with the slowdown in manufacturing, these may not be severe in 2019 as firms hold on to skilled workers unless and until an economic downturn of becomes more evident.

 

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