Weekly Initial Claims for Unemployment Benefits Remain Low as Labor Market Remains Tight
Initial claims for regular state unemployment insurance increased by 7,000 in the latest week, coming in at 207,000 (see first chart). The latest result is the fifth consecutive week below the average of January and February 2020, before the government shutdowns.
The four-week average also rose slightly in the latest week – the second increase in the last three weeks – coming in at 204,500, a rise of 4,750. Despite the increase, the data suggest the labor market remains extremely tight.
The number of ongoing claims for state unemployment programs totaled 1.635 million for the week ending December 18, a drop of 189,013 from the prior week (see second chart). State continuing claims have been below 2 million for ten consecutive weeks.
Continuing claims in all federal programs totaled just 87,850 for the week ending December 18, a decrease of 10,856 (see second chart). The extremely low level reflects the end of the emergency Pandemic Unemployment Assistance program and the Pandemic Emergency UC program.
The latest results for the combined Federal and state programs put the total number of people claiming benefits in all unemployment programs, including all emergency programs, at 1.722 million for the week ended December 18, a drop of 199,869 from the prior week, the third decrease in in a row (see second chart).
Initial claims appear to have stabilized at an extremely low level by historical comparison. The low level of claims combined with the high number of open jobs suggest the labor market remains very tight. Continuing labor shortages, along with materials shortages and logistical issues, are likely to continue to hamper production across the economy, though some recent data suggest businesses may be making some progress on reducing constraints on production.
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.
