New filings for jobless benefits rose for the third straight week to a near 18-month high, adding more signs of a slowdown in the labor market, one of the last defenses against a recession.
New claims, which are a proxy for layoffs, increased by 2.1% to 245,000 for the week ending April 15—about 12.9% higher than a year ago, according to Labor Department data released on Thursday.
Taking out the weekly volatility in the data, our preferred measure—the 13-week moving average—inched up to 227,000, above the pre-pandemic average for the fourth straight week and continuing the upward trend since November.
Continuing claims rose by 3.4% to 1.87 million for the week ending April 8 and by 22.1% from a year ago. That was the highest since November 2021.
The significant increase in continuing claims in the past year implies that jobs have been less abundant, keeping workers on unemployment benefits for longer.
We expect that the full impact of restrictive monetary policies over the past year will not show up until the economy tips into a recession. While the rate-hike cycle might be nearing an end, it often takes the job market more time to absorb the changes in monetary policies.
Because of the nonlinearity of labor data, it is likely that the increase in new claims will remain slow in the second quarter before taking off in the second half of the year.
