Initial jobless claims fell for the week ending 18/11/23 by 10.3% while last week’s release was revised upwards by 2,000 claims. A drop of 10.3% suggests that the labour market is still tight to some extent although seasonal trends may be a contributing factor as stores shore up employees in anticipation of Christmas. This drop was particularly significant as the previous reading, 233k, was the highest recorded data point since August and suggested an accelerating trend.
Continuing Jobless claims also made a slight pullback but for the week ending 11/11/23 which showed there were 1.84mn continued claims, relative to the previous week’s newly revised figure of 1.8632mn (down from 1.865mn) which represents a drop of 22,000/1.18% claims. This again suggests more people are finding jobs in the lead-up to Christmas and is therefore seasonal. In addition to workplaces potentially hiring more people by offering more jobs in anticipation of demand, it may also be the case that people are finding jobs to pay for Christmas gifts which unemployment benefits fall short of.
Either way, I do believe both initial claims and continued claims are being influenced by seasonal changes and therefore, unlikely to be the start of a longer-term downtrend in both categories of claims. With that said, a fall in claims is beneficial for economic growth as more people enter the job market to create value, additionally, it is also beneficial for the Government’s fiscal policy as there is less strain on public finances.
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