In the week ending November 9, the advance figure for seasonally adjusted unemployment claims was 217,000, down 4,000 from the previous week’s unadjusted level of 221,000. The four-week moving average was 221,000, down 6,250 from the previous week’s unadjusted average of 227,250.
The seasonally adjusted insured unemployment rate was 1.2 per cent for the week ended 2 November, unchanged from the previous week’s unadjusted rate. The advance figure for seasonally adjusted insured unemployment during the week ending November 2 was 1,873,000, down 11,000 from the previous week’s adjusted level. The previous week’s level was revised down by 8,000 from 1,892,000 to 1,884,000. The 4-week average movement was 1,874,500, an increase of 1,000 over the previous week’s revised average. This is the highest level for this average since November 27, 2021 when it was 1,928,000. The previous week’s average was revised downwards by 2,000 from 1,875,500 to 1,873,500.
The total number of actual initial claims filed under state programs, unmodified, was 229,478 in the week ending November 9, an increase of 16,735 (or 7.9 percent) over the previous week. Seasonal factors had expected an increase of 20,788 (or 9.8 percent) over the previous week. There were 217,438 preliminary claims in the comparable week in 2023. The unrated advance insured unemployment rate was 1.1 per cent for the week ended 2 November, unchanged.
than the previous week. The total level of unadjusted insured unemployment provided in state programs was 1,647,874, an increase of 969 (or 0.1 percent) from the previous week. Seasonal factors had expected an increase of 11,306 (or 0.7 percent) from the previous week. A year ago, the rate was 1.1 percent and the volume was 1,578,949.
The impact of the unemployment claims on consumer behavior and spending
The unemployment claims greatly affects consumer spending patterns, affecting economic activity in various ways. Here’s how it affects consumer behavior:
1. Income levels
Stable employment: A low Unemployment claims usually indicates that more people are hired, leading to higher levels of gross income. When consumers feel secure in their jobs, they are more likely to spend money on goods and services.
Disposable income: Higher levels of employment increase disposable income, allowing consumers to spend more on discretionary items, such as dining out, travel, and luxury goods.
2. Consumer confidence
Psychological effects: The low unemployment rate boosts consumer confidence, as individuals feel more secure about their financial situation and job prospects. This confidence encourages spending.
Recognizing economic health: When unemployment is low, consumers see the economy as strong, which can lead to an increased desire to make large purchases, such as homes and cars.
3. Spending on necessities versus discretionary items
Necessities: In times of high unemployment, consumers often prioritize spending on basic goods (such as food and housing) and reduce discretionary spending.
Discretionary spending: The low unemployment rate encourages consumers to spend on non-essential items, leading to growth in sectors such as retail, travel and leisure.
4. Use of debt and credit
Borrowing behavior: With a stable labor market, consumers are more likely to take on debt (such as mortgages and personal loans) to finance larger purchases, contributing to overall economic growth.
Credit confidence: A low unemployment rate is often associated with improved credit conditions, making it easier for consumers to access credit and loans.
5. Impact on savings
Savings rates: When unemployment is low and incomes are stable, consumers may feel less need to save for emergencies, leading to lower savings rates and increased spending.
The role of consumer spending in promoting inclusive economic growth
Changes in consumer spending significantly affect overall economic growth. Here’s how these dynamics work:
1. Consumer spending as a major component of GDP
GDP composition: Consumer spending typically accounts for a large portion of a country’s GDP – often around 70% in advanced economies. Therefore, changes in consumer spending directly affect GDP growth.
Economic Index: Increased consumer spending often signals economic health and contributes to higher GDP growth rates.
2. Multiplier effect
Ripple effect: When consumers increase their spending, companies see higher sales, resulting in increased production and potentially higher operating levels. This, in turn, can lead to more consumer spending, creating a positive feedback loop.
Investing in business: Higher consumer demand encourages companies to invest in new projects, expand operations, and hire more employees, further spurring economic growth.
3. Sectoral growth
Impact on different sectors: Consumer spending affects multiple sectors, including retail, services, manufacturing, and construction. Growth in these sectors can lead to job creation and increased economic activity.
In many economies, especially advanced ones, consumer spending heavily influences the services sector, which includes healthcare, education, and entertainment.
Emergency funds Conversely, during periods of high unemployment, consumers may prioritize building emergency savings and limiting discretionary spending.
4. Innovation and entrepreneurship
Stimulating innovation: Increased demand from consumers can spur companies to innovate and introduce new products or services, driving economic growth through technological advancements and improved productivity.
Startups and new ventures: Higher consumer spending can lead to the emergence of new startups, boosting economic dynamism and job creation.
