Today's US Department of Labor report indicated that the number of Americans filing for unemployment benefits rose by 8,000 to 225,000 during the week ended February 23, higher than expected.
Key Takeaways
- The number of initial jobless claims has increased on a week-by-week basis, higher than expected.
- The less-volatile four-week moving average dropped 7,000 positions from the previous week’s average to a total of 229,000 – however, continuing claims also rose.
- Jobless claims rose 8,000 positions to 225,000 total last week.
- Claims for last week were revised upward by 1,000 to 217,000.
Initial jobless claims have shot up again on a weekly basis with extreme volatility seen in recent weeks, some of which has been attributed to the partial US government shutdown which saw many US government contractors out of work for 35 days.
Claims hit a one-year high two weeks ago before dipping again the following week, leading to widespread concerns about the health of the labor market.
The advance seasonally adjusted insured unemployment rate for the week ending February 16 rose 0.1% to 1.3%, an increase of 79,000 which brings the total to 1,805,000.
Softening Labor Market Trend
Analysts had predicted a range of 220,000 – 224,000 for last week’s initial jobless claims.
While the figure is unexpectedly high and the figure for the previous week was revised upward, the four-week moving average has still dipped significantly after a major rise seen recently, indicating that the huge surge of initial jobless claims may have been, as some analysts have stated, nothing more than a blip influenced by national holidays and the government shutdown.
However, continuing claims also came in higher than the expected 1.737 million estimate at 1.805 million with the previous week also revised upward slightly. Continuing claims have trended higher since the near-record lows seen in Q4 2018. The rise in initial and continuing claims will definitely be taken as a warning signal in the eyes of many market analysts. While initial jobless claims levels are still low compared to those of the past few decades, the recent data indicates a slowdown.
First Cut: Initial jobless claims up 8,000 to 225,000 in February 23 week, an insignificant rise that leaves levels low in the historical context. https://t.co/vDOcg4Okh3 pic.twitter.com/cXCd6qN5jm
— Whetstone Analysis LLC (@AnalysisLlc) February 28, 2019
The largest increases in initial claims were seen in Washington, Oregon, Georgia, Rhode Island, and Nevada, with the biggest decreases In Wisconsin, Pennsylvania, Michigan, New York, and Minnesota.
Market Reaction
Gold traded as high as $1,326.96/oz today before dipping to a level of $1,318.10/oz with a low of $1,317.50/oz. Spot gold is still trading up 0.40% although trimmed some gains over the last hour, possibly due to an unexpectedly strong Q4 GDP report.
Gold Price Chart
More articles from Conor Maloney
