
Last week saw a jump in the number of Americans applying for unemployment benefits, with new claims rising to 243,000. The Department of Labor reported a spike of 20,000 new claims, driven largely by an increase in Texas following Hurricane Beryl.
Unemployment claims, which serve as a proxy for layoffs, have been gradually increasing, reflecting a potential slowdown in the labor market. Despite this rise, claims remain relatively low compared to historical levels. However, the recent trends suggest that the job market may be cooling.
Economists prefer to analyze the four-week moving average of jobless claims to understand labor market trends better. This average, which helps smooth out week-to-week volatility, increased by 1,000 to 234,750, signaling a slight uptick in unemployment filings.
Continuing claims, which are reported with a one-week delay, also climbed significantly. These claims, indicating the number of people still receiving unemployment benefits after their initial claim, rose by 20,000 to 1,867,000. This is the highest level of continuing claims since November 2021.
The increase in continuing claims suggests that individuals who have been laid off are having more difficulty finding new jobs. This could point to a broader issue within the labor market, where job opportunities are becoming scarcer.
As the labor market shows these signs of strain, economists and policymakers will need to assess whether additional support measures are required to help stabilize the job market. The ongoing monitoring of these unemployment indicators will be crucial in understanding the overall economic health and determining necessary interventions.