First Weekly Applications for Unemployment Benefits jumped to 240,000 for the week ending Nov. 19, according to data released Wednesday by the Department of Labor. That’s a sharp increase of 17,000 from last week’s upwardly revised count of 222,000, surpassing economists’ expectation of 225,000.
It is the highest weekly total since Aug. 13, according to data from the employment agency.
The number of persistent claims, which includes people who have applied for unemployment benefits for at least two weeks in a row, rose to 1.55 million in the week ending Nov. 12, an eight-month record.
The number of jobless claims has fluctuated near historic lows due to a labor market that has stayed pretty tight, even as workers flowed back after the end of lockdowns during the pandemic era.
Still, those layoffs aren’t necessarily reflected in last week’s claims, as many tech industry workers are covered by severance payments, said Eugenio Alemán, chief economist for Raymond James. Alemán said he is looking for signs of a broad increase in claims from other industries, in which workers are not typical covered by severance payments.
“And that still doesn’t happen today,” he said.
Weekly unemployment claims are volatile — especially around the holidays — and are revised regularly, economists at Oxford Economics wrote in a note Wednesday.
“As a result, we are not reading too much into the larger-than-expected drop in claims,” they wrote.
On average, weekly first jobless claims this year have been under 215,000. And while last week’s 240,000 claims is an increase from that average, it’s still below the 250,000 weekly claims consistent with a good economy and well below the 300,000-plus consistent with a recession, Mark Zandi wrote. , chief economist for Moody’s analytics. via email to CNN Business.
“I view the increase in layoffs through the prism of ‘bad news is good news’,” he wrote. “That is, layoffs are terrible for those who lose their jobs, but it does mean that the job market is cooling, which is critical to curbing inflation and avoiding more aggressive rate hikes by the Federal Reserve.”
Zandi said he expects more layoffs as we head into the new year “as large companies in more sectors begin to cut payrolls”.