New filings for jobless benefits last week stayed above the pre-pandemic level for the second week in a row, continuing to signal a resurgence in layoffs as economic activity slowed.
With more companies announcing layoffs recently, we expect the upward trend in new jobless claims to continue.
There were 229,000 new jobless claims for the week ending June 11, down slightly from an upwardly revised 232,000 in the prior week, the Labor Department reported on Thursday. The pre-pandemic average in 2019 was 218,000.
The data came out a day after the Federal Reserve raised its policy rate by 75 basis points, the largest increase since 1994. As the Fed prioritizes taming inflation, the start of a slowing labor market with fewer hirings and more layoffs has begun.
The reversal in layoffs has become clearer as the four-week moving average increased for the ninth week in a row from the multi-decade low in April. Last week’s figure was 218,500, above the pre-pandemic level for the first time since February.
Our preferred measure for the long-term trend—the 13-week moving average—also trended upward last week, to 196,000.
The total number of continuing claims for the week ending June 4 rose slightly, by 0.2% to 1.312 million, even though a lot more new claims were added during the week.
That muted increase, the second in a row, implied that the market was still tight, and that workers could find new jobs relatively quickly and stay off unemployment benefits.
The insured unemployment rate remained historically low at 0.9% for the week ending June 4.