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Initial jobless claims: Slowing economy pushes claims higher

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A series of alternative and near real-time data show that the economy began to slow on or around June 24. First-time jobless claims, which increased by 1.416 million for the week ending July 18, affirm the evolution of that data and point to risks around a slower pace of workers being recalled to their pre-pandemic jobs.

Pauses, pullbacks, shutdowns and the exhaustion of a one-time release in pent-up demand are the proximate causes for the increase in first-time jobless claims.

None of this bodes well for an economy facing a series of policy cliffs over the next several weeks that will almost certainly result in a weaker quantity of fiscal aid in the second half of the year for an economy still reeling from the pandemic.

The top-line increase of 1.41 million reported by the Labor Department on Thursday represents the 18th week of first-time claims above 1 million. Over that time, roughly 52.7 million people have experienced some form of unemployment and income losses.

Continuing claims for the week ending July 11 decreased to 16.19 million, down from a revised 17.3 million and producing an implied insured unemployment rate of 11.1%.

When the the federal Pandemic Unemployment Compensation program is included, there were 2.39 million people who filed for unemployment insurance. Through the week ending July 4, 31.8 million individuals were on on some form of unemployment insurance.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

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About Joseph Brusuelas

@JoeBrusuelas

Joe Brusuelas, “chief economist to the middle market,” is the preeminent voice championing issues and policies facing midsize companies in the United States and around the world. An award-winning economist, Brusuelas has more than 20 years’ experience analyzing U.S. monetary policy, labor markets, fiscal policy, international finance, economic indicators and the condition of the U.S. consumer.

A member of the Wall Street Journal’s forecasting panel and the UCLA Anderson School of Management's Board of Directors, Brusuelas regularly briefs members of Congress and other senior officials regarding the impacts of federal policy on the middle market and the factors by which middle market executives make business decisions. He also frequently offers his insights on the U.S., Canadian and global economies in the financial media. In 2020, he was named one of the 100 most influential economists by Richtopia. In December 2023, Brusuelas and the economics team were recognized on Bloomberg's list of Best Bond Forecasters after correctly predicting where the benchmark Treasury would end the year.

Before joining RSM in 2014, Brusuelas spent four years as a senior economist at Bloomberg L.P. and the Bloomberg Briefs newsletter group, where he co-founded the award-winning Bloomberg Economic Brief. Earlier in his career, he was a director at Moody's Analytics covering the U.S. and global economies for the Dismal Scientist website. He also served as chief economist at Merk Investments L.L.C. and chief U.S. economist at IDEAglobal.

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