March 2022 Sees 5.1% Surge in New Unemployment Claims Amid Historic Low Continuing Claims

Continuing unemployment claims have reached their lowest point since March 1970, signaling a robust labor market.

For the week ending March 5, 2022, initial unemployment insurance claims in the United States totaled 227,000 on a seasonally adjusted basis. This marks a 5.1% increase, or 11,000 more claims, compared to the previous week's revised figure. After experiencing declines in five of the last six weeks, this uptick surpassed economists' expectations, who had forecasted 216,000 claims, matching the prior week's revised count, according to a Wall Street Journal survey.

The four-week moving average for initial claims edged up slightly by 0.2% to 231,250, compared to the previous week’s revised data. Notably, initial claims were much lower in December 2021, at 188,000.

Key Highlights

• Initial unemployment claims rose 5.1% in the week ending March 5, 2022.
• This increase exceeded economists’ projections by the same margin.
• The four-week moving average for continuing claims dropped 2.0%, hitting the lowest level since March 28, 1970.

Record Low Layoffs Amid Unprecedented Job Openings

Employers currently have over 11 million job openings nationwide, roughly two vacancies for every unemployed individual, yet many positions remain unfilled. To attract talent, companies are enhancing wages and benefits. The rise in new claims during this period was primarily driven by California and New York.

The strong labor demand reflects vibrant consumer demand and a resilient U.S. economic recovery. However, ongoing geopolitical tensions in Ukraine and inflationary pressures—exacerbated by rising oil prices—pose risks to growth. Additionally, anticipated Federal Reserve interest rate hikes aimed at curbing inflation could further impact the economy.

Continuing Claims Show Mixed Signals

Continuing claims, representing those still receiving unemployment benefits, slightly increased by 1.7% to 1,494,000 for the week ending February 26, 2022, following a one-week reporting lag. Despite this, the four-week moving average decreased by 2.0% to 1,506,500, marking the lowest average since March 28, 1970, when it stood at 1,483,500. The prior week's average was revised down marginally.

Over the past five decades, the U.S. civilian labor force has more than doubled, growing from 82.5 million in 1970 to 167 million in early 2022. Correspondingly, the proportion of insured unemployed individuals has halved from 1.8% to 0.9%, underscoring significant labor market improvements.

Seasonally Adjusted vs. Unadjusted Data Insights

The seasonally adjusted initial claims figure of 227,000 for the week ending March 5, 2022, was based on an unadjusted count of 218,072, which rose by 11.2% compared to the previous week. Seasonal trends typically predict a 5.6% increase at this time of year, suggesting actual claims were elevated beyond normal expectations. For context, initial claims during the same week in 2021 were substantially higher at 722,180.

State-Level Unemployment Claims Overview

The U.S. Department of Labor’s data includes all 50 states plus the District of Columbia, Puerto Rico, and the Virgin Islands. In the week ending March 5, 2022, 27 states reported decreases in new claims, while 26 saw increases. Overall, unadjusted claims rose by 22,025.

Massachusetts (-2,381), Pennsylvania (-2,185), Tennessee (-1,417), and Rhode Island (-1,229) recorded the largest declines. Conversely, New York (+16,255), California (+6,233), Kentucky (+3,134), and New Jersey (+1,954) experienced the biggest increases.

The Department of Labor notes that data for this week includes 'advance claims' reported by the paying state, differing from previous weeks where claims were categorized by claimant residence, making direct comparisons less precise. For more consistent comparisons, data from the week ending February 26, 2022, show significant increases in Massachusetts, Rhode Island, D.C., Nevada, and Kansas, and declines in Michigan, California, Florida, Ohio, and Illinois.

States with Highest Insured Unemployment Rates

For the week ending February 19, 2022, the highest insured unemployment rates were observed in Alaska, California, Illinois, New Jersey, Rhode Island (each at 2.4%), followed closely by Minnesota (2.3%), Massachusetts and New York (2.2%), and Michigan, Montana, and Pennsylvania (each at 1.8%).

The national insured unemployment rate remained steady at 1.1% for the week ending February 26, 2022. This rate measures the percentage of the labor force receiving unemployment benefits.

Extended unemployment benefits were available in New Jersey and New Mexico during the week ending February 19, 2022.

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