Initial claims drift sideways, continuing claims jump to more than 3 year high

Reuters

26 Dec 2024 11:33:48 AM

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INITIAL CLAIMS DRIFT SIDEWAYS, CONTINUING CLAIMS JUMP TO MORE THAN 3 YEAR HIGH

Last week, 219,000 U.S. workers joined the line outside the unemployment office USJOB=ECI, according to the Labor Department.

The number marked an insignificant dip from the prior week and landed 2.2% short of consensus.

The underlying trend, as expressed by the four-week moving average of initial claims, is essentially sideways with a slight upward bias.

For much of 2024, with few exceptions, new claims have been range bound in the 200,000 to 240,000 range, or close to the sweet spot for healthy labor market churn.

Ongoing claims USJOBN=ECI, on the other hand, reported on a one-week delay, surged by 2.5% to 1.91 million, the highest level since November 2021, blasting past the 1.88 million analysts expected.

The spike in continuing claims appears to suggest it’s taking longer for laid off workers to find suitable replacement gigs, a theory supported by November’s spike in the average unemployment duration to 24.3 weeks, the longest it’s been since April 2022.

“That’s a sign that the labor market is cooling down and it’s probably gonna get cooler going into the first quarter of 2025,” Peter Cardillo, chief market economist at Spartan Capital Securities told Reuters.