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First Cut: Jobless claims remain low and on trend in February 29 week

Initial jobless claims dipped 3,000 to 216,000 in the week ended February 29 after an unrevised 219,000  in the prior week. Claims continued along the recent trend in the low-200,000’s and well within normal week-to-week variation. The four-week moving average was 213,000, not materially different from the week’s headline reading. The report was essentially on market expectations.

The Labor Department cited no special factors and only Alabama had an estimate for claims. I note that the date for annual revisions for this report has not yet been announced, but the revised numbers should be released by the end of March if the normal pattern is followed.

So far there is no evidence of a rise in layoffs that might be associated with businesses affected by the spread of COVID-19. In the present tight labor market, firms are probably reluctant to lay off skilled employees in a slowdown that is likely to be temporary but of unknown duration. Workers lost now could easily be reemployed elsewhere. Attracting and retaining new employees is a cost most businesses would find greater than weathering a soft patch.

Continuing claims levels in the week ended February 22 were up 7,000 to 1.720 million, little changed from the prior week. The four-week moving average is not far below that at 1.721 million. And once more, the insured rate of unemployment was a tight 1.2% in a string of readings that has been effectively the same since May 2018.

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