The employment sector has been improving in the US since summer after the grand reopening, with the unemployment rate falling below 7% last month. The unemployment claims were also declining, falling below 800K in October, but they popped up above that threshold level again in the first two weeks of December. In the second half of last month claims declined again below 800K, but today’s report showed a big jump last week.

Initial Jobless Claims and Continuing Claims

• Initial unemployment claims 965K vs. 789K estimated
• Prior report revised lower to 784K from 787K previously reported (minus 3K
• 4 week moving average initial claims 834.2 5K vs. 816K last week
• Continuing claims 5,271K vs. 5,000K estimate
• 4 week moving average continuing claims 5,215.75K vs. 5,274.75K last week
• Pandemic unemployment assistance claims 284K vs 161K last week
• Full report

The jobless claims number is the highest since August 21 when claims were last above 1000 (at 1011K). The jobless claims can have an impact around the holiday seasonals being out of whack. Also the extension of the benefits may have had an impact as well.

Nevertheless, the data is a worrisome trend. It also advances the storyline for the Fed to be on hold for a while still, and for Congress to pass more stimulus to counteract the impact from the Covid-19 spread.