MACRO: US jobless claims reach highest mark since October

Initial jobless claims jumped from 231k to a seasonally adjusted rate of 286k in the week ended 15 January, according to the Labor Department, well above analysts’ estimates of 220k. It is the highest level since mid-October and the largest weekly increase in claims since mid-July as a surge in COVID-19 cases driven by the Omicron variant disrupted business activity and as employers continued to have difficulty retaining workers amid record rises in job quits. On a non-seasonally adjusted basis, initial claims slumped by 83 thousand to 337 thousand, with notable decreases being recorded in New York (-14.0 thousand), Missouri (-7.5 thousand) and Texas (-6.1 thousand). Continuing jobless claims in the US, which measure unemployed people who have been receiving unemployment benefits for a while, rose to 1.635 million in the week ending January 8th, from a revised 1.551 million a week before and above market expectations of 1.580 million.

Initial unemployment claims rose for a third straight week, coming in near the 300,000 level. Source: DoL USA

The overall condition of the US labour market has been a puzzling one over the last 12 months. Despite rising NFP figures and strong stock market, lower levels of the job market have failed to fully lift off. Some analysts believe that the rising number of claims which we observed in recent weeks coupled with subdued personal spending is a sign that the economy is slowing and may require further government support.