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The Key Take-Aways
- Last week there were 242,000 claims for unemployment benefit, an increase of 17,000 over the previous week.
- It was still low, but higher than October.
- Since the data tends rise or fall dramatically from week-to-week, and especially during holidays, economists should take each week’s unemployment statistics with a pinch of salt.
New unemployment claims reached a 2-month high in the last week.
According to the Department of Labor (DOL), 242,000 individuals filed for unemployment insurance benefits in the week ended Dec. 7. This is an increase of 17,00 from the previous weeks. It was also the highest rate since October. It was the highest number since July, excluding the spike due to Hurricanes Helene & Milton in October. According to a survey of economists by Dow Jones Newswires and The Wall Street Journal, it was also above the consensus forecast for 220,000 claims.
Although the claims were not as high historically, other statistics show that unemployment remains low. If this trend is sustained, then it may be an indicator of a possible slowdown of the job market. The number of jobs available has decreased in the last few months. Hiring is also down as companies struggle with rising interest rates and high costs to borrow money for their businesses.
To be honest, it is hard for economists to read too much from a week’s worth of data, particularly around the holidays. The data may become distorted and difficult to interpret, making it impossible to see underlying patterns.
“Claims are always volatile over the holidays, through mid-January, so it’s even more important than usual to look at the trend rather than single week’s numbers,” Oliver Allen, Senior U.S. Economist at Pantheon Macroeconomics wrote about this in a recent commentary.
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