Initial Claims for Unemployment Benefits Hold Above 800,000 For Third Week
Initial claims for regular state unemployment insurance totaled 847,000 for the week ending January 23, down 67,000 from the previous week’s upwardly revised tally of 914,000 (see first chart). Claims have been above 800,000 for three consecutive weeks, in the 700,000 to 1 million range for 22 consecutive weeks, and well above the pre-pandemic level of 212,000 in early 2020 for 45 weeks.
The four-week average rose again, up 16,250 to 868,000. The four-week average has drifted higher since hitting a low of 740,500 for the week of November 28, rising in eight of the last ten weeks. Persistent initial claims at such a historically high level, particularly in light of the recent trend higher, remain a threat for the labor market recovery and the economy (see first chart).
The number of ongoing claims for state unemployment programs totaled 5.446 million for the week ending January 9, down 281,273 from the prior week. State programs had been trending lower since early March, but the downward trend has turned to a flat or slight upward trend since hitting a low of 5.214 million for the week ending November 21 (see second chart). For the same week in 2019, ongoing claims were 2.138 million.
Continuing claims in all federal programs jumped in the latest week, reversing the prior week’s drop, and coming in at 13.836 million for the week ending January 9, up 2.575 million (see second chart).
The total number of people claiming benefits in all unemployment programs including all emergency programs was 18.282 million for the week ended January 9, up 2.293 million from the prior week.
Government restrictions on consumers and businesses remain a significant threat to the outlook for economic growth. The longer the virus continues to spread (along with the possibility of mutations prolonging the outbreak), consumers remain restricted, and businesses remain closed or limited, the more uncertain a labor market recovery becomes and the higher the probability of a slow and drawn-out economic recovery.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
