The good news is that initial unemployment claims fell to a half century low. The bad news has to do with inflation climbing at its fastest pace in 30 years.
The Good News – Initial Unemployment Claims Down to Lowest Level Since 1969
New filings for state unemployment benefits tumbled to their lowest level, 199,000 on a seasonally adjusted basis, in 50 years during the week ending November 20, according to the US Department of Labor.
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This drop in initial unemployment claims marks a milestone in the economy’s recovery from the COVID pandemic. Simply remember back to April 2020 when weekly unemployment claims peaked at more than 20M when the virus forced everything and everyone to shut down. If April 2020 is too far back, remember early January 2021 when a resurgence of the virus brought state claims back up to more than 900,000 in one week.
Yes, new filings for unemployment benefits have been falling since the January peak but those filings have continued to remain above pre-pandemic levels. Not anymore during the week ending November 20. These latest filings are, for the first time since April 2020, below pre-pandemic levels.
Another good sign is that the number of people with continuing claims (people filing for benefits who have already filed initial claims for unemployment benefits) came in at 2.4M. The number of people filing continuing claims just before Thanksgiving last year exceeded +20M.
The Bad News – Lightening Fast Inflation
The Commerce Department’s latest report indicated that consumer prices climbed +5% in the 12 months through October. According to the Personal Consumption Expenditure price index, most often referred to as the CPI, this is the fastest inflationary pace of increase since 1990.
The CPI was lifted by a +30.2% annual increase in energy prices and an increase of +4.8% in food prices. Prices rose +0.6% m/m as supply chain bottlenecks continued to play havoc on some products and product components.
During the stand-alone month of October, household spending increased +1.3% while personal income jumped only +0.5%.
How rising inflation affects home buying? Read a separate post titled “What Rising Inflation means for Home Buying Right Now” on this week’s calendar.
Thanks to the New York Times and National Public Radio.