New filings for jobless claims exceeded the pre-pandemic level for the third week in a row as labor demand eased while more stories of companies laying off workers made headlines.
New claims inched down by only 0.9% last week, to 229,000, from an upwardly revised 231,000 in the prior week, according to government data released Thursday. The pre-pandemic level in 2019 was 218,000.
The steady weekly data suggests that the impact of the Federal Reserve’s interest rate increases has yet to show up in earnest as monetary policies often take months to make their way through the economy.
The three-week stretch of initial jobless claims pushed the four-week moving average—a proxy for the short-term trend—to the highest level since late January at 223,500.
The 13-week moving average—a proxy for the longer-term trend—increased for the seventh straight week, reaffirming the reversal in the layoff trend.
The increase in layoffs in recent weeks, however, does not seem to match the number of layoff announcements, especially from the technology sector.
That suggests that the level of labor demand remains quite strong, despite the signs of a slowdown, and that many laid-off workers can quickly find new jobs without the need to apply for unemployment benefits.
If labor demand continues to outpace supply, we expect the rate of increases in new jobless claims to be gradual. The risks of a steeper rise might come from a hard landing to a cooling economy, which has become more likely by the month as a result of the Federal Reserve’s increasingly hawkish tone.
The total number of continuing claims for the week ending June 11 was 1.315 million, up by 0.4% from the prior week, also rising for the third week in a row.