Initial unemployment insurance (UI) claims fell last week in a normal Thanksgiving lull. Seasonally adjusted claims fell as well, however seasonal adjustment is likely less reliable during a global pandemic. The drop reverses a pandemic-induced surge seen in the previous two weeks, but was not enough to drive UI and PUA claims combined below the 1 million mark.
Fluctuations in claims from the holidays and winter furloughs are normal. This makes it particularly difficult to read the tea leaves during a critical stage in the crisis. The pandemic is surging just as an end-of-year benefits cliff for millions of Americans looms and negotiations in the lame duck Congress make slow progress.
Tomorrow’s jobs report may provide the first warning signs from the recent surge in the pandemic. While a repeat of the spring crash is unlikely, it did show how quickly economic damage can accumulate. Promising vaccine news offers a light at the end of the tunnel, which makes it all the more important that the economy holds onto gains made to-date. We don’t want to trip over our own feet with the finish line in sight.
Today’s UI Claims Report
Initial UI claims fell to 713,824 from 836,277, on a non-seasonally adjusted basis, according to the latest figures from the Department of Labor for the week ending November 28. On a seasonally-adjusted basis, claims fell to 712,000 from 787,000, in a larger-than-usual Thanksgiving week decline.
Pandemic Unemployment Assistance (PUA) claims dipped to 288,701. UI and PUA claims combined fell to just over 1 million, reversing the increase over the previous 2 weeks. However, the Thanksgiving lull was not enough to push UI and PUA claims combined below the 1 million new weekly claims threshold—the labor market has added over 1 million claims every week for 37 weeks in a row.
Non-seasonally adjusted continuing claims for UI fell to 5.2 million for the week ending November 21, more than expected. On a seasonally-adjusted basis, continuing claims dropped to 5.5 million. While the improvement in continuing claims had slowed, the faster decline could be because benefits are being exhausted for many claimants.