Claims tick up/Productivity gains

Initial jobless claims totaled 224k, 12k more than anticipated and up from 215k last week. This brings up the 4 week average to 208k from 203k and puts it back to where it was in the first week of January. Continuing claims, delayed by a week, rose to 1.898mm, up 70k w/o/w which is the most since mid November.

I’ll add the January Challenger Report to this and they said job cuts in January totaled 82,307. While down 20% from January 2023, it’s the “highest number of job cuts announced in January since January 2009, when 241,749 cuts were announced in the first month of that year.” The financial sector and technology were the two areas that led the job cuts in 2024.

They said further, and to what we heard seemingly every day, “Waves of layoff announcements hit US based companies in January after a quiet fourth quarter.” Challenger mentioned “increased automation and AI adoption,” but we’ve seen increased automation since the history of time and I think it’s a bit too early to blame generative AI for job losses. More reasonable was their next explanation, “though in most cases, companies point to cost cutting as the main driver for layoffs.”