Initial jobless claims increased to 853,000 (much higher than expected) last week compared to 716,000 in the prior week. The level of continuing unemployment claims (where the data is lagged by one week) also increased to nearly 5.8 million from roughly 5.5 million in the prior week. Until the latest reading, continuing jobless claims had been steadily declining from the peak of nearly 25 million in early May. Although jobless claims have declined from the early stage of the pandemic, they have remained well above the 2019 average of 1.7 million. Given the resurgence of the virus and renewed lockdown measures, we believe the labor market is likely to remain challenged over the winter months.