US Weekly Initial Jobless Claims Rise, Labor Market Remains Tight

Treasury yields dipped and the U.S. Dollar fell after the release of the weekly U.S. jobless claims report that showed a slightly more-than-expected rise.

The Details

According to data published by the US Department of Labor (DOL), there were 196,000 initial jobless claims in the week-ending February 4. The new figure follows the previous week’s print of 183,000 and came in a little worse that the market expectation of 191,000.

Peeling back the details reveals that the advance seasonally adjusted insured unemployment rate was 1.2% and the 4-week moving average was 189,250, a decrease of 2,500 from the previous week’s unrevised average.

Instant Reaction

The rise is in the right direction for Fed purposes, but the data isn’t close to resolving the key issues facing central bank policymakers in their quest to weaken an extremely tight labor market.

Claims have remained low despite high-profile layoffs in the technology industry as well as the interest rate-sensitive finance and housing sectors. There is anecdotal evidence that companies are generally reluctant to lay off workers after experiencing difficulties during the pandemic, according to Reuters.

Workers remain scarce in some industries. There were 1.9 openings for every unemployed person in December, government data showed last week. According to an institute for Supply Management survey last Friday, some services businesses in January reported they were “unable to hire qualified labor,” saying that “supply is thin,” Reuters added.