Jobless Claims Tick Up Again, Defying Expectations

Bump is likely due to the economic effects of increasing virus cases

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This one can’t be blamed on Ida.

The number of people initiating claims for unemployment insurance rose for the second straight week—unexpectedly this time, likely due to the economic effects of increasing virus cases.

Initial claims for benefits rose to 351,000 for the week through Sept. 18, an increase of 16,000 from the previous week’s revised level, according to seasonally adjusted data released Thursday by the Labor Department—a surprise to economists who had expected claims to drop. Weekly volumes are now moving in the wrong direction after hitting fresh pandemic lows two weeks in a row in late August and early September.

Claims increased as expected two weeks ago, as filings delayed by Hurricane Ida were processed. But last week’s increase had nothing to do with the hurricane, according to economists, who instead chalked it up—as they do with much involving the economy these days—to rising virus cases. The overall outlook for the job market is still good as businesses struggle to hire and the demand for workers stays high, and claims should resume their downward path in the weeks ahead, Nancy Vanden Houten, lead economist at Oxford Economics, wrote in a commentary Thursday. The general trend in claims has been downward—with decreases in six of the last nine weeks—but it will likely be a bumpy road en route to pre-pandemic levels.

The volume of claims now stands about 100,000 away from the last level before the pandemic—256,000—on March 14, 2020. Claims have been stuck between 310,000 and 425,000 since Memorial Day, still better than the 750,000-900,000 range where claims hovered for much of the last year.

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  1. U.S. Department of Labor. “Unemployment Insurance Weekly Claims.”

  2. Federal Reserve Economic Research. “Initial Claims.”

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