U.S. Unemployment Claims Rise

After recent confidence on the labor market from the Federal Reserve and Department of Labor, new data shows unemployment may have started an upswing.

The Department of Labor reported that weekly initial unemployment claims rose to 282,000 in the week ending December 5, an increase of 4.4 percent from the previous week. That drove the four-week moving average for initial unemployment claims above 270,000, above expectations from most economists.

After recent confidence on the labor market from the Federal Reserve and Department of Labor, new data shows unemployment may have started an upswing.

The Department of Labor reported that weekly initial unemployment claims rose to 282,000 in the week ending December 5, an increase of 4.4 percent from the previous week. That drove the four-week moving average for initial unemployment claims above 270,000, above expectations from most economists.

Seasonally adjusted insured unemployed people rose to over 2.2 million for the week ending November 28, an increase of 82,000 from the previous week. That growth in unemployment runs counter to many forecasts, which saw a declining amount of unemployment claims.

Higher Unemployment, Higher Optimism

Those forecasts have also recently bolstered confidence at both the Labor Department and the Federal Reserve. Just this week Secretary of Labor Thomas E. Perez defended President Obama’s employment track record, noting that “13.7 million jobs” were created throughout Obama’s tenure, while also claiming, “the economy continues to recover at a steady clip.”

He pointed to the increase in jobs in November, which rose by 211,000.

At the same time, the Federal Reserve has made several public statements arguing that employment remains robust. Janet Yellen, in her last testimony to the United States Congress, said the economy “has recovered substantially” and that unemployment “is at a normal level” for the first time since the Global Financial Crisis of 2008-2009.

This has driven the Fed to look at raising the Federal funds rate, which it may do at the next Federal Open Market Committee meeting on December 16th-17th.

Low Labor Participation

Despite the headline improvements in unemployment rates, there are several indicators of extreme weakness in America’s labor market. The labor participation rate, which measures how many Americans are actually working or looking for work, has reached its lowest level since the 1970s.

Estimates are that 38.2 million American men over the age of 16, or about 12 percent of the population, do not have jobs. According to the Bureau of Labor Statistics, male workers have suffered the hardest hit in a decline in manufacturing and construction jobs, which does not become less detrimental due to the growth in lower-paying service sector jobs.

At 68.6 percent, the labor participation rate for men has reached its lowest level in history.

Additionally, male unemployment has risen to 5.2 percent in November, up from 5.1percent in October, while the labor participation rate for women has seen a relative improvement. Nonetheless, the total number of Americans in the labor market continues to decline even as the population rises.

While some of that decline relates to baby boomer retirements, the labor participation rate for Americans under 55 has declined.