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

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

Macro
CD
Christopher Dembik

Head of Macro Analysis

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 is not intended to and does not change or expand on this. 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/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.