US Jobless Claims Rise Amid Economic Uncertainty, Housing Market Concerns

Article Summary

• US continued jobless claims are on the rise.
• Potential impact on October's unemployment rate.
• Delays in releasing official economic data due to technical issues and past federal government shutdown.
• Weakened housing builder confidence due to labor market anxieties.
• The impact of high mortgage rates and housing prices on affordability.

Data released by the US government on Tuesday showed a significant increase in the number of Americans claiming unemployment benefits between mid-September and mid-October. This suggests that the October unemployment rate may be elevated, as companies face an uncertain economic environment that discourages hiring.

The Labor Department only released continued jobless claims data for the weeks ending October 11 and 18. The government conducted the survey required for the October jobs report on businesses and households in the week ending October 18.

A Labor Department spokesperson said, "A technical issue caused some data to be released prematurely," adding, "The issue is currently being corrected and complete data will be released before close of business on November 20, 2025." The spokesperson was responding to an inquiry from Reuters.

Due to the recently ended 43-day federal government shutdown, official weekly initial jobless claims data has not been released since late September.

On the other hand, the Labor Department's Bureau of Labor Statistics (BLS) announced that it will publish the September PPI report next Tuesday and import and export price data on December 3. The White House had previously warned that the October unemployment rate may not be released due to the inability to obtain relevant data from households as a result of the longest government shutdown in history.

Data showed that in the week ending October 18, the number of people continuing to receive unemployment benefits after their first week of filing (a metric considered a proxy for hiring conditions) increased by 10,000 on a seasonally adjusted basis, to 1.957 million. This represents a significant jump compared to the 1.916 million in the week ending September 13.

Looking at the significant increase in continued claims between the benchmark weeks for the September and October employment surveys, the October unemployment rate is likely to remain at an elevated level, consistent with weak hiring conditions. An ADP report showed that in the four weeks ending November 1, private companies cut approximately 2,500 jobs on average each week.

The BLS will release the delayed September nonfarm payrolls report on Thursday. The August unemployment rate was 4.3%, near a four-year high. However, during the nonfarm payroll survey period, initial jobless claims remained unchanged between September and October, and some economists believe this indicates that the labor market has not deteriorated significantly.

“This means that the report does not confirm widespread claims that layoffs accelerated during the government shutdown,” said Carl Weinberg, chief economist at High Frequency Economics. “This should be a comforting signal to the market, and should also reduce market expectations that the Federal Reserve will cut interest rates in December.”

Federal Reserve officials have previously signaled their unwillingness to cut interest rates again next month.

Housing Builder Confidence Remains Low

Other data showed that the weak labor market and resulting concerns about household finances are weighing on the housing market, and housing builder confidence remained low in November, remaining at its lowest level for the 19th consecutive month. The National Association of Home Builders/Wells Fargo Housing Market Index rose just 1 point this month to 38 points. Economists surveyed by Reuters had previously expected the index to remain flat at 37 points.

“Relatively high mortgage rates, a weak labor market, and high home prices all mean that new home sales are unlikely to see a significant rebound in the near term,” said Oliver Allen, senior US economist at Pantheon Macroeconomics.

“A meaningful turning point in the housing market is likely to emerge around mid-2026 - we expect that by then mortgage rates will have fallen further, alongside stronger economic growth and a gradually improving labor market.”

Housing affordability has become a highly sensitive political issue. US President Donald Trump proposed this month to improve housing affordability through 50-year mortgages, but this idea has been criticized by some supporters and housing market experts, who argue that this would lead to homebuyers paying more interest and accumulating assets more slowly.

The National Association of Realtors (NAR) estimated this month that the median age of first-time homebuyers has risen to 40 years. The association said that the typical homebuyer was in their late 20s in the 1980s.

The survey showed that the current sales conditions sub-index rose 2 points this month to 41 points, while the future sales expectations sub-index fell 3 points to 51 points. The prospective buyer traffic sub-index rose 1 point to 26 points. The report stated that the proportion of home builders indicating that they are using price cuts as a promotion rose to 41%, the highest since May 2020; the average price cut remained unchanged at 6%; and the proportion of home builders taking various incentive measures remained constant at 65%, unchanged from September.

“More and more builders are using incentives to close deals, including price cuts,” said Buddy Hughes, chairman of the National Association of Home Builders. “But many potential buyers are still waiting and seeing.”

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