New filings for jobless benefits spiked by 28,000 last week, another sign of a softening labor market.
Total new filings rose to 261,000, the highest since October 2021, the Labor Department reported on Thursday.
There were no distortions to the report like the fraudulent claims in Massachusetts that affected recent data. But there might be noise as a result of the long Memorial Day weekend.
The sharp increase added to the rise in our preferred measurement of claims data—the 13-week moving average—which remained on an upward trajectory. Barring the months that were most affected by the pandemic, the series reached levels not seen since 2018.
Together with recent data from the ISM manufacturing and service sectors, the spike in layoffs, if sustained, should prompt more concerns over what has been a resilient labor market.
Continuing claims fell to 1.76 million from 1.8 million for the week ending May 26, continuing the sideways move since April.
Data on both initial claims and continuing claims in the next two months will be at the forefront of the discussion on whether we will fall into a recession in the second half of the year, as we have forecast since last year.