New weekly jobless claims fell 75,000 to 712,000 in the week ended November 28, the Department of Labor said Thursday.
That was better than expected. Economists had expected claims to tick up from the initial estimate of 778,000 to 780,000 following two consecutive weekly increases. The previous week was revised up to 787,000, a climb
Claims can be volatile around holidays. Last week’s decline may reflect a last-minute hiring surge at retail stores. It may also reflect some employers being reluctant to layoff employees during the holiday week and some who lost their jobs waiting until after the holidays to file for benefits. That could set up next week for a jump in claims.
Jobless claims—which are a proxy for layoffs—remain at extremely high levels. Prior to the pandemic, the highest level of claims was 695,000 hit in October of 1982. In March of 2009, at the depths of the financial crisis recession, jobless claims peaked at 665,000.
Even when the economy is creating a lot of demand for workers, many businesses will shed employees as they adjust to market conditions. But in a high-pressure labor market, those employees quickly find jobs and many never show up on the employment rolls. What appears to be happening now is that many workers who lose their jobs cannot quickly find replacement work and are forced to apply for benefits.
Claims hit a record 6.87 million for the week of March 27, more than ten times the previous record. Through spring and early summer, each subsequent week had seen claims decline. But in late July, the labor market appeared to stall and claims hovered around one million throughout August, a level so high it was never recorded before the pandemic struck. Claims moved down again in September and hade made slow, if steady, progress until the election.
New restrictions on businesses aimed at stemming the resurgence of coronavirus are likely contributing to layoffs now. Some states and cities have imposed new curfews and discouraged people from leaving home for non-essential reasons. Businesses faced with this suppressed demand will likely be forced to cut their payrolls to reflect lower sales.
Claims can be volatile so economists like to look at the four-week average for a better view of the health of the labor market. This fell by 11,250 to 739,500 for the week ended November 28.
Continuing claims—those made after the initial filing, representing ongoing unemployment—get reported with a week’s lag. For the week ended November 21, these came in at 5,520,000, a decrease of 569,000. That represents a re-acceleration of the fall-off of continuing claims, a reversal of the slow down seen in the previous two weeks. The four-week moving average for continuing claims fell to 6,194,000, a decrease of 425,000 from the previous week’s revised average.
The highest insured unemployment rates in the week ending November 14 were in the Virgin Islands (7.9), California (7.3), Hawaii (7.1), Nevada (6.7).
Illinois saw the biggest jump in claims in the week ending November 21, adding 18,786 people to the unemployment rolls. Michigan and Washington followed closely behind, with 17,285 and 13,499 new claims respectively. Louisiana and Massachusets saw significant declines in claims.