U.S. Jobless Claims: Another good metric but…

Macro
Christopher Dembik

Summary:  U.S. initial jobless claims and continuing claims are down again - which is rather positive considering the reintroduction of new business restrictions in states due to rising Covid-19 counts. However, the market is not really impressed. (1) Continuing claims remain still very elevated, at 5.500k versus 1,700k before the outbreak. (2) Investors are all eyeing at tomorrow's government jobs report to have a better picture of the real state of the labor market.


Today’s U.S. labor market statistics are better-than-expected but the market impact is rather limited. Initial jobless claims, which does not capture the rate of hiring and rehiring, declined from 778k to 712k last week (Nov. 28). This is the first time since the outbreak that initial claims are reaching such a low level (versus 282k pre-Covid). Continuing claims, which represent the current number of insured unemployed workers filing weekly for unemployment insurance benefits, are reported with a two-week lag. In the week ending Nov. 22, it was standing at 5,520k vs 6,089k the prior week. Before Covid, continuing claims were at 1,702k, which is three times lower than the current level. It shows the extend of the crisis on the labor market and it highlights there is still a long way to go before getting back to the pre-pandemic era. Looking at states level, we observe a slight deterioration in the labor market in Illinois (initial jobless claims at +18.8k), Michigan (+17.3k) and Washington (+13.5k). At the other end of the spectrum, the greatest decreases in initial jobless claims occurred in Louisiana (-33.6k), Massachusetts (-22.6k) and New Jersey (-783). So far, the new business restrictions that have been implemented in various states over the month of November do not seem to have derailed the recovery in the labor market. But the worst might be to come. The risk is elevated that the United States will face a post-Thanksgiving covid surge that might be amplified by the upcoming Christmas holiday. Although the vaccination campaign might start at the end of the month in the United States, after the FDA will deliver emerging authorization use for the Pfizer vaccine (around Dec. 10), it is not excluded that new restrictions will be put in place in the short term if the number of cases continues to increase, which would seriously disrupt the recovery of the labor market in the United States. Said differently, there is no cause for happiness in today’s data.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
Beethovenstrasse 33
CH-8002
Zürich
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed here or within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.