The latest rise in continuing jobless claims stands in stark contrast to what the unemployment rate suggests about the labor market.
Claims data now points to rising labor market slack, as business conditions grow increasingly uncertain amid shifting trade, fiscal and monetary policies.
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Continuing claims rose to 1.965 million for the week ending June 28, up from 1.955 million in the prior week.
It’s now harder for unemployed workers to find jobs than at any point in the past three years. With business confidence still subdued compared to earlier this year, companies are pulling back on hiring—particularly for entry-level positions.
A much stricter immigration policy has placed a ceiling on the unemployment rate by limiting the labor supply. But that doesn’t mean jobless workers can easily step in to fill open roles, as mismatches in skills or location remain key barriers.
The claims data aligns more closely with last week’s increase of only 74,000 in private payrolls—far below what the top-line jobs number suggested.
While the unemployment rate remains a key labor market gauge for the Federal Reserve, this may be a moment when that single metric is no longer sufficient to guide its decision on interest rates.
In the same report from the Bureau of Labor Statistics, initial jobless claims fell to 227,000 from 232,000 in the prior week. This implies layoffs have cooled down from the recent peak. Still, the reporting week included the Fourth of July holiday, which might affect the final outcome.
