Initial Claims Soar to 5-Month High
Initial claims for unemployment benefit jumped to their highest level since August as continued fallout from the coronavirus pandemic and a stumbling economy kept workers on the sidelines.
The Labor Department yesterday reported for the week ending January 9, the advance figure for seasonally adjusted initial claims jumped to 965,000, an increase of 181,000 from the previous week’s revised level. The four-week moving average rose to 834,250, an increase of 18,250 from the previous week’s revised average.
The advance seasonally adjusted insured unemployment rate rose to 3.7 percent for the week ending January 2, an increase of 0.2 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 2—also known as continuing claims—rose to 5,271,000, an increase of 199,000 from the previous week’s unrevised level of 5,072,000. The four-week moving average fell to 5,215,750, a decrease of 59,000 from the previous week’s unrevised average of 5,274,750.
“While seasonal adjustment is hard this time of year, the recent wave of COVID is clearly weighing on jobs,” said Sarah House, Senior Economist with Wells Fargo Securities, Charlotte, N.C. “The worsening state of the pandemic is bearing down on the labor market.”
House noted the start of the year usually sees a surge in filings, and the timing of holidays makes seasonal adjustment particularly hard this time. “But that cannot fully explain away the rise,” she said. “Ten months into the pandemic, job instability remains tremendous. New filings relative to the number of jobs in the economy remains higher than at the peak of the Great Recession.”