It's Jobless Thursday!!

Initial unemployment claims rose slightly for the 4rd straight week.\, and the less volatile 4 week moving average rose.

I think that we are seeing the contractionary effects of the end of extended unemployment benefits:

New applications for unemployment benefits are trending this month near the lowest levels of the pandemic, as employers continue to limit layoffs during Covid-19’s latest surge driven by the Delta variant.

Initial unemployment claims, a proxy for layoffs, have edged higher the past three weeks largely due to temporary factors. An accounting issue in California has effectively double counted those shifting from recently ended federal pandemic benefits to other programs. Parts shortages in Michigan are causing short-term auto industry layoffs.

Still, the four-week moving average, which smooths out volatility in the weekly figures, was 340,000, just above the lowest level since the Covid-19 crisis began last year.

New claims rose by 11,000 to a seasonally adjusted 362,000 last week, the Labor Department said Thursday. California was a driver of the increase. Claims rose by 18,000 in the state last week but, in total, fell for the rest of the country, on a non-seasonally adjusted basis.

………

Jobless applications edging higher “reflects the moderation in overall economic activity,” said Kathy Bostjancic, economist at Oxford Economics. “However, we expect initial claims to return to their downward path in the weeks ahead as the economy resumes stronger momentum.”

The recent level of claims is well down from millions of applications made weekly in the spring of 2020, but remains above 2019’s weekly average of 218,000. Claims trended down much of the summer despite an increase in Covid-19 cases due to the Delta variant and the economic uncertainty that caused.

The 218K in 2019 was pretty close to the level one would expect just from normal turnover in an ordinary economy.

362,000 is more that 50% above this.  As I have noted before, by the standards of the before time, this is a pretty awful report.

Thursday’s claims report provides the first look at unemployment rolls after extended and enhanced federal unemployment benefits put in place to respond to the pandemic ended in all states on Sept. 6. Continuing claims made to pandemic programs are reported on a several-week delay.

Yeah, that is the concerning part.  The government spending that has kept the economy afloat has ended.

Where does it go now?