This week’s new and continuing jobless claims all rose off of last week’s pandemic lows, but while I suspect the downward trend has broken, I don’t think we can say so decisively yet.
On an unadjusted basis, new jobless claims rose by 228,982 to 947,504. Seasonally adjusted claims rose by 137,000 to 853,000. These were the worst readings in 4 and 2 1/2 months, respectively. The 4-week moving average also rose by 35,500 to 776,000, the highest reading in a little over a month. Here is the close up since the end of July (for comparison, remember that these numbers were in the range of 5 to 7 million at their worst in early April):
Before proclaiming DOOOM, let me point out that the YoY changes have barely budged higher in the adjusted claims, and *unadjusted* claims had their best week yet since the start of the pandemic:
This is because initial claims almost always jump by about 40% in the week just after Thanksgiving. This year they “only” jumped about 32%. So while it is quite likely that the renewed explosion of the pandemic has indeed caused new jobless claims to start to trend higher since 4 weeks ago, I don’t think we can say so confidently unless and until seasonally adjusted new claims rise over 900,000 and the 4 week average over 850,000, which would take both out of the range they have been in over the past 4 months.
Continuing claims, which historically lag initial claims typically by a few weeks to several months, rose by 533,336 to 5,780,895 on unadjusted bases, and rose by 230,000 to 5,757,000 after seasonal adjustment, the first increase since August 29:
Both initial and continued claims remain at or above their worst levels from the Great Recession.
Although last week marked pandemic lows for most of the jobless claims data, we have failed to make any meaningful new lows in a month. Last week I wrote that “my guess is [that nonfarm payrolls gains] will be the weakest reading of the past 6 months. I still suspect the near term trajectory in new jobless claims is going to be poorer.”
Both of these things happened. I suspect the unemployment claims situation is going to continue to worsen as long as the pandemic does. I have no idea how much worse it will get.