November 19, 2020 | 08:49
UI Claims.... Stopped Falling
Four consecutive weekly improvements came to an abrupt end. U.S. initial jobless claims rose in the week to November 14, up 31k to a 2-week high of 742k. This is, however, barely a blip compared to the brutal period in March (over 6.6 mln claims), but the deterioration comes during the survey week for the November payrolls report. And, though it is not a perfect indicator, the uptick in claims is a sign of the impact the new shutdowns/restrictions are having on the job market. This also arrives in a week that showed retail sales slowing ahead of the key holiday season. But there were fewer Americans who remained on UI... they either landed a job or their benefits expired. (Note that the number of people claiming the Pandemic Emergency Unemployment Compensation plan rose again and is now at a record 4,377k.) Continuing claims plunged another 429k in the first week of November to 6,372k, the lowest since mid-March.
Most of these are in the services sector, where places like restaurants and gyms are being forced to limit their numbers to prevent a further spread in the virus. Manufacturing, meantime, is still barreling along. The two different surveys for November so far have showing continued expansion (>50). The Philly Fed index slipped 0.6 pts in November to a still-high ISM adjusted 60.1 reading. However, it was interesting to note that the 6-month outlook (aka expectations) took a big 18.4 pt step down to a 3-month low of 44.3. Something to keep an eye on.