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November 7, 2019 Blog 1 min read
Initial jobless claims remain near their half-century low, with little indication of a pickup in layoffs.
11-7-19 Jobless Claims ChartInitial claims for Americans applying for first-time unemployment insurance edged lower by 8,000 to 211,000 for the week ended November 2, coming in below expectations for 215,000. Claims for the prior week were revised slightly higher by 1,000 to 219,000.

The four-week moving average of jobless claims was virtually unchanged at 215,250. Current claims remain well below 300,000 – a key threshold generally associated with a healthy labor market.

October’s jobs report provided further evidence that labor market conditions remain surprisingly strong despite the slowing economy, particularly in the manufacturing sector. Payroll gains with revisions were well above expectations in October, despite having to overcome the impact of the protracted GM strike.

Job creation has moderated this year but remains solid. The fact that both jobless claims and the unemployment rate remain near half-century lows speak volumes about the strength of the labor market.

Thus far, layoffs haven’t shown any sign of a sustained rise even as other economic indicators have softened. The labor market has been surprisingly resilient despite headwinds in the manufacturing and business segments of the economy. These have not been enough to derail the labor market, which remains a critical support for the consumer sector – overwhelmingly the primary engine of growth for the aging expansion.

The health of the consumer has been a key narrative and has helped to mitigate concerns amid a backdrop of rising recessionary risks. In addition, easier monetary policy and improving financial conditions have provided some much-needed reassurance to consumers and businesses.

The bottom line is that labor market strength remains a key pillar under the consumer sector and one that shows no sign of crumbling. While the pace of growth has slowed and uncertainty has risen in recent quarters, the relative health of the jobs market and consumer sector appear to be providing a firm support for an economy finding its way through a mid-cycle slowdown.

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Plante Moran Financial Advisors (PMFA) publishes this update to convey general information about market conditions and not for the purpose of providing investment advice. Investment in any of the companies or sectors mentioned herein may not be appropriate for you. You should consult a representative from PMFA for investment advice regarding your own situation.