Fed's Waller: It's hard to interpret recent uninsurance claims data

Fed's Waller: It's hard to interpret recent uninsurance claims data

Fed’s Waller: Interpreting Recent Unemployment Claims Data Remains Challenging

Federal Reserve Governor Christopher Waller highlighted the complexities of assessing recent U.S. labor market data, particularly unemployment claims, during a speech on the economic outlook. While state-level unemployment insurance claims have risen in recent weeks, Waller emphasized that these figures remain relatively low by historical standards and may not fully capture the broader weakening in labor demand.

Waller noted that the 43-day government shutdown disrupted key economic data collection, forcing policymakers to rely on a mix of private-sector and limited public-sector indicators. For instance, continuing unemployment claims—data still available from states—have increased compared to 2023 and 2024 levels, reflecting longer job-search durations for unemployed workers. However, he cautioned that large corporate layoffs, particularly those tied to AI-driven productivity gains, may not yet be fully reflected in initial claims data.

The Fed governor also addressed the ongoing debate over whether weak job creation stems from declining labor supply or demand. Waller argued that the data point to a greater reduction in demand, citing stagnant wage growth, declining job vacancies, and a drop in quits. Private-sector job creation metrics, such as ADP payroll data, further underscore this trend, showing a sharp slowdown in hiring since May 2025.

Despite these challenges, Waller acknowledged that inflation expectations remain well-anchored, with underlying inflation near the Fed’s 2% target. He advocated for a 25-basis-point rate cut at the December FOMC meeting as a risk-management measure to support the labor market, which he described as “near stall speed.”

Waller’s analysis underscores the difficulty of navigating conflicting data signals in a fragile economic environment. While state-level claims suggest stability, broader labor market indicators—including weak consumer sentiment and elevated borrowing costs—highlight vulnerabilities. His call for monetary easing reflects a cautious approach to mitigating risks amid persistent uncertainty.

(https://www.federalreserve.gov/newsevents/speech/waller20251117a.htm): Federal Reserve Governor Christopher Waller, Speech on the Economic Outlook (November 17, 2025).