Jobless Claims: Sharp Increase, Not Yet a Trend Changer

Bottom Line: Claims rose sharply on a seasonally adjusted basis in the first full week of 2022 as employment offices appear to have processed backlogs. While claims were above the 4-week average and nearly back to the 13-week average, it is too early to suggest this marks a shift in the trend. Seasonal adjustments remain difficult, and our Nowcast model has been suggesting for weeks that there was a backlog of claims that would likely get processed in the first few weeks of January. Nonetheless, this bears close watching in the coming weeks.Initial Jobless Claims ROSE  23k in the week ended January 8th to 230k, ABOVE the 4-week average of 211k, BELOW the 13-week average of 234k but 674k BELOW the year-ago level. Non-seasonally adjusted Claims ROSE 104k.Continuing Claims FELL 194k in the week ended January 1st to 1.56M, BELOW the 4-week average of 1.72M, BELOW the 13-week average of 1.99M and 3.68M BELOW the year-ago level. Continuing Claims for the 25th of Dec were revised down from +1.75M to +1.75M.The Insured Jobless Rate FELL -20bps in the week ended January 1st. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.