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Continued unemployment claims, data from Department of Labor, chart by Mish

Today, the US Department of Labor released Unemployment Claims for the week ending August 2.

Initial Unemployment Claims

• In the week ending August 2, the advance figure for seasonally adjusted initial claims was 226,000, an increase of 7,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 218,000 to 219,000.
• The 4-week moving average was 220,750, a decrease of 500 from the previous week’s revised average. The previous week’s average was revised up by 250 from 221,000 to 221,250.

Continued Claims

• The advance number for seasonally adjusted insured unemployment during the week ending July 26 was 1,974,000, an increase of 38,000 from the previous week’s revised level. This is the highest level for insured unemployment since November 6, 2021 when it was 2,041,000.
• The previous week’s level was revised down by 10,000 from 1,946,000 to 1,936,000. The 4-week moving average was 1,951,750, an increase of 5,000 from the previous week’s revised average. The previous week’s average was revised down by 2,500 from 1,949,250 to 1,946,750.

Initial Claims and 4-Week Average

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Initial unemployment claims are smack in the middle of a 200K to 250K range where things have been for over three years.

However, continued claims keep rising.

This is an indication that it’s much harder to find a job once you lose one.

Continued claims bottomed in mid 2022 at 1,349,000 and are now 1,974,000.

Continued Claims, 15+ and 27+ weeks Unemployed

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The huge problem with looking at continued claims alone is people expire benefits.

They are unemployed but uncounted in continued claims.

Most states offer 26 weeks unemployment, with some less. To adjust for the loss in benefits, one needs to factor in long-term employment over 26 weeks.

The monthly average of continued claims plus 27+ week unemployment is 3,778,000 through July. That’s up from a low of 2,513,000 in September of 2022.

And3.8 million is understated because not all states offer 26 weeks. Also job-hopping reduces benefits.

So look beyond the stable (for now) initial claims to see what’s really happening.

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