Last week, the Department of Labor released data showing that there were approximately 238,000 initial claims for unemployment benefits, which was an increase of 4,000 from the previous week. This rise in claims brought the four-week average of initial claims to its highest level since August 2023.
In addition, continuing claims, which are filed by individuals who have been receiving benefits for at least a week or more, also increased to their highest level since November 2021. This indicates that Americans are remaining unemployed for longer periods of time.
Economists like Luke Tilley from Wilmington Trust are closely monitoring specific data points within the monthly jobs report to gain insight into the current state of the labor market. Tilley highlighted the increase in unemployed persons by reason for unemployment, which has risen by about 200,000 people on a three-month average basis compared to the previous year.
While raw job growth numbers may appear strong, a closer look at the data suggests a labor market that is at risk of declining back to a more normalized state. Layoff activity in the US has not shown a significant spike, with fewer job cuts announced in June compared to May. However, the number of layoffs is still higher than last year’s figures, indicating ongoing challenges in the job market.
According to data from Challenger, Gray & Christmas, US-based employers announced 48,786 job cuts in June, which is down from May but higher than the previous year. This suggests that while there may not be a sudden increase in layoffs, the job market continues to face uncertainties and challenges.