Initial claims for unemployment insurance across the U.S. were 215,000 for the week ending Feb. 26, 2022, on a seasonally adjusted basis. This represented a decline of 18,000 (7.7%) from the revised figure for the prior week. This was the fifth decline in the past six weeks. It also was 4.4% below the estimate of 225,000, per economists polled by Reuters.
The four-week moving average for initial claims fell to 230,500, down by 6,000 (2.5%) from the revised figure for the prior week. In December 2021, initial claims had fallen to 188,000.
- Initial claims for unemployment insurance in the week ending Feb. 26, 2022, fell by 7.7% from the prior week.
- Initial claims were 4.4% lower than economists' estimates.
- The four-week moving average for continuing claims was down by 2.5%, reaching its lowest level since April 4, 1970.
- Fed Chair Jerome Powell told a U.S. House committee that "the labor market is extremely tight."
- Powell supports an increase of 25 basis points (bps) in the federal funds rate to combat inflation.
Layoffs Down, Job Openings Up
There were a near-record 10.9 million job openings at the end of December 2021, and companies are eager to retain employees. As a result, new weekly initial unemployment insurance claims soon may drop below 200,000, a figure last reached in early December 2021.
Global outplacement firm Challenger, Gray & Christmas reports that U.S.-based employers announced 15,245 job cuts in February 2022, down by 20% from January 2022. Layoffs were down by 56% compared to a year ago.
Meanwhile, companies also announced plans to hire 215,127 workers in February 2022, the largest figure for any February since Challenger started tracking monthly hiring figures in 2002. By comparison, 77,630 new job openings were announced in January 2022.
"The latest numbers give more evidence that job creation is strong, and employers continue to hold fast to their workforces," said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. "The churn in the labor market is coming from resignations," he added.
A key risk is that Russia's war against Ukraine may disrupt supply chains, and thus stem the growth in employment. However, economists generally expect that, in 2022, the labor market will recoup all the jobs lost during the COVID-19 pandemic.
Spurring Federal Reserve Interest Rate Hikes
Initial unemployment insurance claims have dropped precipitously from a record high of 6.149 million set in early April 2020. A tight labor market is spurring wage increases, which, in turn, are adding to inflationary pressures.
Indeed, Federal Reserve Board (FRB) Chair Jerome Powell, in testimony before the U.S. House Committee on Financial Services on March 2, 2022, observed that "the labor market is extremely tight." Partly as a result, Powell said that he would support a increase of 25 basis points (bps) in the federal funds rate at the March 15-16 meeting of the Federal Open Market Committee (FOMC), and that he would be "prepared to move more aggressively" if inflation does not decline as quickly as expected.
Continuing Claims Decrease
Unemployment insurance continuing claims fell, although compilation of this data lags new claims by one week. For the week ending Feb. 19, 2022, the number of continuing claims, also called the number of insured unemployed persons, was 1,476,000, an increase of 2,000 (0.1%) from the revised number for the prior week, on a seasonally adjusted basis.
The four-week moving average for continuing claims fell by 36,250 (2.3%) from the revised figure for the prior week to 1,539,500. This is the lowest level for this average since April 4, 1970, when it was 1,516,000. The previous week's moving average had been revised downward by 250 (0.02%), from 1,576,000 to 1,575,750.
Adjusted vs. Unadjusted Data
The seasonally adjusted nationwide initial claims figure of 215,000 cited above for the week ending Feb. 26, 2022, was derived from an unadjusted figure of 194,693. The unadjusted figure fell by 21,285 (9.9%) from 215,978 in the prior week. However, the normal seasonal factors observed at this time of year should have led to a decline of 2,985 (1.4%) from the prior week to 212,993 in the week ending Feb. 26, 2022, all else equal. During the comparable week in 2021, there were 756,629 initial claims.
Initial Jobless Claims by State
Most states reported declines in new claims, led by 9,200 fewer unadjusted initial claims in Michigan, 4,673 fewer in California, 2,388 fewer in Florida, 2,147 fewer in Ohio, and 2,089 fewer in Illinois. The largest increases in unadjusted initial claims were 3,137 in Massachusetts, 1,039 in Rhode Island, and 850 in Nevada. Note that the statistics compiled by the U.S. Department of Labor also include the District of Columbia, Puerto Rico, and the Virgin Islands, in addition to the 50 states. As indicated above, total unadjusted new claims fell by 21,285 during the week ending Feb. 26, 2022.
However, the U.S. Department of Labor cautions that the breakdown by state for the week ending Feb. 26, 2022, contains what are called advance claims. These advance claims are reported by the state liable for paying the unemployment compensation. However, data for previous weeks classify claimants by state of residence. Thus, the state-by-state figures for the week ending Feb. 26, 2022, and the prior week are not completely comparable.
For comparable figures, the Department of Labor instead looks at the data for a week earlier, which ended Feb. 19, 2022. The largest increases in initial claims for that week, compared to the week before that, were in Michigan (+3,500), Kansas (+724), Utah (+454), Connecticut (+349), and the District of Columbia (+239), while the largest decreases were in Missouri (-6,949), New York (-3,037), Ohio (-2,212), California (-2,182), and Tennessee (-1,959).
Highest Insured Unemployment Rates
Meanwhile, the highest insured unemployment rates for the week ending Feb. 12, 2022, were in Alaska (2.6%), California (2.6%), New Jersey (2.5%), Rhode Island (2.4%), Massachusetts (2.3%), Minnesota (2.3%), New York (2.2%), Illinois (2.1%), Connecticut (2.0%), Montana (1.9%), and Pennsylvania (1.9%). The advance seasonally adjusted national figure for the week ending Feb. 19, 2022, was 1.1%, unchanged from the unrevised figure for the prior week. The insured unemployment rate is the ratio of persons receiving unemployment benefits to the total number of persons in the labor force.
During the week ending Feb. 12, 2022, extended unemployment benefits were available in New Jersey and New Mexico.