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Jobless Claims Increased Last Week, but Labor Demand Remains High

Weekly jobless claims increased last week but continue to trend downward in 2022, according to Reuters (subscription).

Jobless claims increase: Weekly jobless claims increased last week for the first time in a month, up 23,000 to 248,000. Continuing claims fell by 26,000 to 1.593 million. The weekly jobless claims increase was unexpected, but it did not shift economists’ projections for another month of employment gains in February.

Jobless claims trend down: Claims have been declining since reaching a three-month high during the height of the omicron surge in mid-January. Claims have dropped dramatically since reaching an all-time high of 6.149 million in early April 2020 during the onset of the pandemic.

Reason for increase: Economists attribute the rise in claims to expected volatility in the data and poor weather affecting much of the United States last week.

  • Our view: “Despite mixed news in the latest figures, these data continue to reflect a labor market that has improved significantly over the course of the past year,” said NAM Chief Economist Chad Moutray.

Housing updates: Housing starts dropped 4.1% in January, and single housing starts fell 5.6%. The decline is likely temporary as housing permits increased 0.7% to the highest point since 2006. The number of previously owned homes on the market continues to hit record lows, and rising mortgage rates may slow housing demand.

  • Our take: “Overall, builders remained optimistic about the coming months, with solid sales growth expected over the next six months despite ongoing concerns, even with a slight easing in the latest NAHB Housing Market Index,” said Moutray. These data suggest that housing construction should improve over the coming months.”
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