Jobless Claims Stay Low, Congress Averts Government Shutdown

A week after falling to the lowest level since 1969, US jobless claims rose. But not as much as anticipated.

222,000 Americans filed for unemployment benefits in the week to November 27 (figure below). That was 18,000 less than consensus.

The prior week was revised even lower, to 194,000.

The four-week moving average dropped to 238,750, within shouting distance of the 225,500 on March 14, 2020.

Continuing claims dropped 107,000 to 1.956 million, also lower than forecast.

Recall that the prior week’s initial claims figures were distorted. A quirk in the seasonal adjustment element contributed to the sizable drop (green in the figure, below). So, this week’s increase isn’t necessarily “bad.”

The data came on the heels of a solid ADP report, which showed private US employers added more than a half-million jobs last month.

Meanwhile, US lawmakers struck a deal on a stopgap funding agreement to avert a government shutdown. The bill would fund the government through February 18. It wasn’t quite “eleventh hour,” but it was close. Current spending lapses on Friday.

Some Senate Republicans threatened to force a shutdown as a show of protest against the Biden administration’s vaccine mandate for large employers. On Wednesday, the House Freedom Caucus implored Mitch McConnell to use “all procedural tools at your disposal to deny timely passage” of the legislation.

In other words, America’s far-right is now demanding that centrist, establishment Republicans shut down the government unless The White House stops pursuing mass vaccinations via employer mandates. As The New York Times wrote, “the push presented a conundrum for McConnell, a survivor of polio who for months has made a point of championing coronavirus vaccines and pushing back against misinformation from other Republicans who have questioned their efficacy.”

All of this comes on the eve of November payrolls. Market participants remained consumed with Omicron headlines and the prospects for an accelerated Fed taper timeline.