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Friday, March 29, 2024

Even DOL Puzzled After Jobless Claims Unexpectedly Soar Most In Over Two Years

Courtesy of ZeroHedge View original post here.

In addition to the surprising miss in PPI, which may rudely awake the Fed out of its “no rate cut for a year” slumber, moments ago the DOL reported a shocker, when the latest weekly initial jobless claims soared unexpectedly by 49K, from a near-cycle low of 203K to 252K, far above the 214K consensus expectations, and the highest print since 2017!

This was the biggest monthly jump since September 2017, however back then there was a reason: hurricanes; this time there was no immediate explanation for the sudden spike, although the Labor Department did note that volatility is “not unusual” around the Thanksgiving holiday.

And while it is likely that there was a big seasonal reason for today’s jump, it was not immediately clear what it is, especially since it should have been factored in the expectations as it is recurring every year. Meanwhile, looking at the unadjusted data, the number was even more jarring, rising by a whopping 100,697 claims in the week to a total of 317,509 in the week ending December 7.

As even the BLS admits, “the seasonal factors had expected an increase of 39,217 (or 18.1 percent) from the previous week. There were 261,525 initial claims in the comparable week in 2018.” That said, it is possible that the spike may be due to seasonal layoffs coming in early this year, although in prior years this spike usually took place later in December.

A breakdown by state did not provide color on what caused the spike: the largest increases in initial claims for the week ending November 30 were in Ohio (+1,504), Iowa (+1,194), Arkansas (+815), Oklahoma (+811), and Wisconsin (+733), while the largest decreases were in California (-12,676), Texas (-5,780), New York (-5,471), Florida (-1,845), and Georgia (-1,819).

We look to Larry Kudlow for color on what snapped in the first week of December, as left without an explanation the unexpected surge in claims is certainly an ominous inflection point for the state of the US labor market.

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