It looks like more people than expected are having a hard time this holiday season. Last week, the number of Americans applying for unemployment benefits (for the first time) rose to its highest level since June. Fortunately, the numbers are still at the low end, indicating a still healthy US job market.
Also known as “initial jobless claims,” the measure rose by 17,000 to reach a seasonally-adjusted 268,000 in the week through November 26, according to the Labor Department. Again, this is the highest level of these claims in the last five months and, more importantly, higher than the expected 250,000 initial jobless claims.
Of course, data like this—unemployment applications—can be volatile, shifting week in and week out. This is particularly true around the holidays. Seasonal adjustments are difficult over this quarter as hiring fluctuates widely. Even on an unadjusted basis, though, claims fell last week; though less than what the Labor Department had expected.
“As the last few weeks demonstrate, we are in the midst of a time of the year when weekly readings tend to exhibit above-normal volatility that reflects noise rather than signal,” explains Amherst Pierpont Securities chief economist Stephen Stanley. “Thus, we should brace for these types of swings all the way until Presidents Day in February.”
It is, perhaps, more important to note, however, that jobless claims did jump 35,000 over the past two weeks, nearly returning to its number from two weeks before. The more-stable four-week moving average, though, only showed a slightly higher edge, increasing by only 500 to reach 251,500.
Accordingly, Pantheon Macroeconomics chief economist Ian Shepherdson comments in a note to clients, “We have no reason to expect the trend to change significantly for the foreseeable future.”
Overall,l the US labor market remains healthy across the boar. Unemployment hovers at a meager 5 percent (or below), and has been for 13 months, straight. Furthermore, the labor-force participation rate continues to climb—albeit very slowly—after several years of decline. In addition, non-ag employers added, on average, 181,000 jobs every month over the first 10 months of 2016. That is a solid—though slower—pace over last year’s monthly average (229,000 jobs).
Finally, Federal Reserve governor Jerome Powell comments, “Taken together, labor market indicators show an economy that is on solid footing and close to our mandate of maximum employment.”