US Unemployment Claims Increase

Facts

• New unemployment claims increased more than analysts expected for the week ending Oct 1., rising 29K to a seasonally adjusted 219K, according to the US Dept. of Labor. Economists had predicted 203K claims for that period.
• Despite these statistics, the labor market has remained strong in the face of the Federal Reserve’s raising of its policy interest rate from almost zero percent into the 3-3.25% range.
• The Dow Jones Industrial Average sank 0.4%, the S&P 500 slipped 0.3%, and the Nasdaq Composite dropped 0.2% at the stock market opening Thursday in reaction to the unemployment news.
• Challenger, Gray & Christmas, a global outplacement firm, issued a separate report saying that US employers cut nearly 30K jobs in Sept., 46.4% more than in August. However, layoffs were down 21% this year compared to the same time in 2021.
• For perspective, volatility is expected in the week-to-week claims. Accordingly, many economists look at a four-week moving average, which has recently moved up by just 250 claims.

Sources: Finance, MSN, and Breitbart.

Narratives

• Democratic narrative, as provided by Fortune. The Fed has gotten some of the desired job market results from its rate hikes. The economy isn’t in, nor does it seem headed for, a recession. There’s increased participation in the workforce, and demand for labor is nearly back to pre-COVID normal. This is good economic news for Biden and the Democrats ahead of the mid-terms.
• Republican narrative, as provided by Townhall. The US economy is a wreck, and there’s nothing the Fed can do to save it unless Pres. Biden and the Democrats stop their reckless spending. We need a plan that cuts spending, increases domestic energy production, and provides tax and regulatory certainty for small businesses to avoid a dangerous recession.