The number of people filing for first time unemployment benefits spiked to a 26-year high in the latest week, according to the US Department of Labor. For the week ending December 6th, initial jobless claims jumped by 58,000, to 573,000, its highest levels since 1982. This was a surprise, as economists were expecting 525,000 new claims for the week. Initial claims running consistently atop the 350,000 mark would signal some weakening in the labor market. Claims above 400,000 are seen by many as a signal of recession.
Having witnessed extremely volatile measurements in the past few weeks, it is wise to consider the four-week moving average of initial claims, which smooths out one-time factors such as bad weather or holidays. The four-week moving average also spiked higher, by 14,250 to 540,500. That’s also at its highest level since late 1982.
It is pretty obvious now that businesses are laying more employees off, and at a faster pace, and that the unemployed are having a tougher time looking for a replacement job. A year ago, initial claims were at 337,000.
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