Job demands without work climb to 224,000, their highest level in 4 and a half months

Bloomberg News / Landov

Numbers: The number of Americans claiming unemployment benefits in the week leading up to Thanksgiving reached the highest level in four and a half months, which could reinforce the renewed concern over the US economy.

Initial jobless claims, a rough way to measure layoffs, increased from 3,000 to 224,000 in the seven days ended November 17. This figure was well above the 215,000 forecasts of economists surveyed by MarketWatch.

Unusually, the previous week's estimate of the number of new claims was increased from 5,000 to 221,000. Rarely is the weekly number revised so abruptly.

The monthly average of new claims also increased from 2,000 to 218,500.

What happened: New jobless claims reached their highest level since June 30 and have broken through a chain of 18 consecutive weeks below 220,000. A Ministry of Labor official could not name any specific factor explaining the recent increase, although the claims become irregular during the holiday season.

The layoffs are still pretty weak, though.

The number of people already receiving unemployment benefits has decreased from 2,000 to 1,67 million. These so-called continuous claims are at the lowest level since the early 1970s.

Lily: A huge US trade deficit with China could prevent Trump and Xi from concluding an end-of-year deal

Big picture: The shocking fall of the stock market this week suggests that investors are more worried about the future of the economy. The increase in the number of UI claims and a sluggish reading of business investment in October are likely to worsen concerns.

However, according to most measures, the economy still seems to be doing well. The US labor market is the strongest in decades and most households have had the best financial situation for years. Unless there is a significant reduction in spending, the economy is expected to continue to grow over the next year.

Lily: Global growth will slow down here

Market reaction: The Dow Jones Industrial Average

DJIA, -2.21%

and the S & P 500

SPX, -1.82%

should open higher Wednesday, after a pair of brutal sales this week having erased all 2018 stock market gains. A poor report on durable goods and an increase in the number of UI claims could however limit these gains.

The 10-year Treasury yield

TMUBMUSD10Y, + 0.00%

broke its seven-year record to just over 3%, reflecting recent concerns about the strength of the US economy.