While the number of actual Americans filing for jobless benefits for the first time dipped to 337.4K from an 8-month high of 420.8K last week, on a seasonally-adjusted, initial claims unexpectedly soared from 231K to 286K, a huge miss to expectations of 225K, the highest print since October 8 and the latest confirmation that the economy is slowing rapidly not just because of Omicron but due to general exhaustion at the consumer level the result of stimmies having been spent long ago.
While continuing claims on a seasonally-adjusted basis rose from a fresh pre-COVID low of 1.551MM last week to 1.635MM, on a non-seasonally-adjusted basis, continuing claims jumped to a fresh 3 month high of 2.075mm, the highest since the first week of October.
Overall, the number of Americans filing for some form of unemployment benefit rose again from 1.948mm (unadjusted) to 2.128MM.
And while pundits and economists will be quick to blame everything on Omicron (which of course is transitory), they will again be wrong because we are now entering the phase where the US consumer is now tapped out. But of course, just as the Fed erred last year and allowed inflation to run red hot, in 2022 it won’t spot the economic slowdown in time and will keep tightening right into a major recession if not worse…. at which point Powell will of course panic and unleash an even bigger easing cycle than the Covid one.