The number of first-time unemployment claims in the United States surged by 44,000 last week, marking the largest increase in four and a half years. This stands in stark contrast to the significant decline reported the previous week, creating a different scenario. Typically, the labor market experiences seasonal fluctuations during the winter holiday season.
Data released by the U.S. Department of Labor on Thursday, December 11th, revealed that for the week ending on December 6th, the number of initial claims for unemployment benefits rose to 236,000, the highest increase since March 2020. In contrast, the data for the previous week (Thanksgiving holiday week, ending on November 29th) was 192,000, marking the lowest point in three years.
According to Reuters, economists recommend focusing on the four-week moving average to more accurately understand the employment market situation. They noted that the data on initial claims for unemployment benefits typically fluctuates significantly during the holiday period.
The four-week moving average from the past weeks shows an average of 217,000 initial claims for unemployment benefits per week, indicating that the labor market situation in the United States remains stable.
In recent times, several major companies including Amazon and PepsiCo have announced layoffs, with nationwide layoffs in October reaching the highest level since early 2023. Most analysts believe that considering seasonal factors, the current labor market is in a state of “no firing, no hiring.”
Before seasonal adjustments, the number of initial claims last week surged by nearly 115,000, also marking the largest increase since March 2020. States with large populations such as California, Illinois, New York, and Texas were the main areas of increase.
The employment report for November, delayed by a 43-day government shutdown, will be released next Tuesday. This report will include the non-farm employment data for October. However, due to the government shutdown preventing the collection of household survey data (unemployment rate is based on this survey data), the unemployment rate data for October is unavailable.
Due to weak labor supply and demand, the labor market has stagnated, with economists attributing this to reduced immigration and lowered import tariffs. The application of artificial intelligence in certain job positions has also weakened the demand for labor.