New jobless claims will end 2022 on a positive note
New jobless claims end 2022 on a positive note; preview of tomorrow’s jobs report
– by New Deal democrat
Initial claims started off the year – or ended last year if you are technical about it – on a positive note, declining 19,000 to a 3-month low of 204,000. The more important 4 week moving average declined 6,750 to 213,750, a two-month low. Continuing claims for the prior week also declined by 24,000 to 1,694,000 (due to either a software or human entry glitch, FRED recorded the entries as December 31, 2023! Which leaves a one-year gap, so I have omitted this week’s data on the graph below):
All three numbers also remained lower YoY. The most important leading indicator, the YoY% change in the 4-week moving average of new claims, is 3.2% lower than its level one year ago (due to the same glitch, this week’s data is omitted on the below graph):
Although seasonal distortions can be at their maximum right now, this is a very good weekly report.
Tomorrow we get the much more important monthly jobs report. Because initial claims lead the unemployment rate, and have remained low, I expect the unemployment rate to remain unchanged +/-0.1%. As to payrolls themselves, I expect the three-month average of 272,000 to continue to slowly decline, which suggests a monthly number below 250,000. Because tax withholding came in negative YoY for the second month in a row in December, I will be on particular alert for a downside outlier compared with recent reports.
Additionally, I will be looking to see if there is deterioration in some leading employment metrics that haven’t rolled over yet; specifically construction and manufacturing employment. Since the weekly Staffing Index has also weakened in the past month, I will also be looking to see if temporary employment continues to decline.
Tech firms leading job cuts in Corporate America
Reuters – Jan 5
Big Tech firms are leading a string of layoffs across corporate America as companies look to rein in costs to ride out the economic downturn.
Rapid interest rate hikes, weak consumer demand and an economic slowdown in China have forced firms such as Amazon, Walt Disney, Facebook-owner Meta and American banks to trim their workforce.
As a pandemic-led demand boom rapidly wanes, tech companies shed more than 150,000 workers in 2022, according to tracking site Layoffs.fyi, and more layoffs are expected as growth in the world’s biggest economies start to slow.
Amazon.com Inc:
The e-commerce giant said company-wide layoffs would impact over 18,000 employees, raising the figure from 10,000 layoffs it announced months ago.
Meta Platforms Inc:
The Facebook-parent said it would cut 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as it grapples with a weak advertising market and mounting costs. …
Guess a job is a job, but when banking, retail, and entertainment are the good tech employers, then our economy had gotten to be more ironic than productive.