U.S. Continuing Claims Surpass 1.9 Million, Hitting a Three-Year High

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The U.S. labor market remains balanced, but unemployed individuals are facing increasing challenges in re-entering the workforce, according to data released by the U.S. Bureau of Labor Statistics on November 27.

Initial jobless claims for the week totaled 213,000, down 2,000 from the revised figure of 215,000 in the prior week, marking the lowest level since April this year. The four-week moving average decreased by 3,750 to 217,000, also the lowest since May.

 

In contrast, continued claims for unemployment benefits rose by 9,000 to 1,907,000 from the revised 1,898,000 in the previous week, reaching their highest level since November 2021. This increase reflects not only the effects of October’s hurricanes and the Boeing strike but also highlights the growing difficulty for unemployed individuals in returning to the labor force.

 

Minutes from the Federal Reserve’s November meeting, released on November 26, revealed that while the risk of a significant labor market downturn has lessened compared to September, some officials remain concerned about potential further deterioration. The sustained rise in continued claims could be one indicator of such risks.

The upcoming release of employment data in early December will be particularly critical.  If the unemployment rate and nonfarm payrolls remain at levels that indicate a balanced labor market, the Fed may consider slowing the pace of rate cuts in 2025. This would be based on an assessment that inflationary risks remain elevated while downside risks to the labor market are gradually diminishing.