There were fewer layoffs last week but many more workers remaining on unemployment rolls, signaling hiring slowdowns and economic uncertainty.
The U.S. labor market is flashing mixed signals, with a new report showing a seven-month low in the number of weekly initial jobless claims but a three-year high in the number of American workers continuing to receive benefits after an initial filing, signaling fewer layoffs but increasing difficulty getting rehired.
The latest unemployment
data from the Labor Department, released on Nov. 21, shows that initial claims for jobless benefits fell by 6,000 to 213,000 for the week ending Nov. 16, marking a seven-month low. However, continuing claims—representing those still receiving benefits after an initial filing—jumped by 36,000 to 1.91 million, the highest level in three years.
A number of analysts noted the mixed signals, with some saying the rise in continuing claims could boost the unemployment rate. Others went further, suggesting that the likelihood of a recession has increased.
“There is little evidence of large layoffs taking place,” said Gisela Hoxha, an economist at Citigroup. “However, in a low-hiring environment those individuals that are laid off are finding it harder to get a new job and are remaining on unemployment benefits for longer, which implies upside risk to the unemployment rate.”
While historically low at 4.1 percent
in October, the unemployment rate has risen over the past year, up from 3.8 percent in October 2023, a sign that the labor market has softened. Federal Reserve officials cited labor market cooling as a factor behind their latest decision to lower interest rates, though they still described job conditions as “solid.”
Also, the latest data from the Bureau of Labor Statistics (BLS) showed that the U.S. economy added a paltry 12,000 jobs last month,
well below analysts’ forecasts for 113,000 positions and the smallest monthly gain in four years.
“Continuing claims are surging again but new claims are falling,” the Real Developments, CFA account said in a
post on X. “Not many people are losing their jobs, but when you do, no one’s hiring, so you can’t find a new one. This is a typical pre-recession pattern. As soon as layoffs increase, unemployment skyrockets because no one’s hiring the laid-off workers.”
Manufacturing, in particular, has emerged as a weak spot in the labor market. The sector has shed jobs for three consecutive months, reflecting broader struggles with declining demand and shrinking new orders. In October, manufacturing accounted for the loss of 46,000 positions, per BLS
data, with industry insiders pointing to slowing activity in 11 of 14 tracked industries.
“In October, manufacturing hours worked fell by the most since December 2023, while unemployment insurance claims rose and building permits declined,” Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, said in a Nov. 21
statement.
The difficulties in manufacturing hiring align with a broader economic signal, namely the continued decline of the Conference Board’s Leading Economic Index (LEI). The LEI, which aims to predict economic turning points, fell by 0.4 percent in October, marking its 18th straight month of decline. New manufacturing orders were among the largest contributors to the LEI’s drop, alongside declines in hours worked and building permits.
“The largest negative contributor to the LEI’s decline came from manufacturer new orders, which remained weak in 11 out of 14 industries,” Zabinska-La Monica said.
Economists often look to the LEI’s trajectory as an early warning system for recession risks. With manufacturing employment and activity
faltering, combined with a labor market struggling to reabsorb laid-off workers, the latest indicators suggest the U.S. economy could be headed for a rough patch.
