Weekly average initial claims up for fourth week in a row

Initial claims for regular public unemployment insurance fell by 2,000 in the week ended June 25 to 231,000. The previous week’s 233,000 was revised up from 229,000 (see first chart). In a long-term historical comparison, initial claims remain very low but have increased significantly since hitting a low of 168,000 in the week ending April 1, 2022.

The four-week average rose for the fourth consecutive week and the eleventh time in the last twelve weeks to 231,750, up 7,250 from the previous week, and reaching its highest level since November 26, 2021. a very tight labor market, although the recent upward trend is a growing concern.

The number of current applications for state unemployment programs for the week ended June 11 was 1,286 million, up 17,836 from the previous week (see second chart). The state’s claims for ongoing payments have risen for three consecutive weeks and four of the last five weeks, although the level remains very low (see second chart).

According to the latest results from the combined federal and state programs, the total number of people claiming benefits under all unemployment programs was 1,314 million in the week ended June 11, compared with 1,297 million the previous week. The latest result is the 18th consecutive week below 2 million.

Initial claims remain at very low levels compared to past periods, but the upward trend has become more evident in recent weeks. Weekly initial UI claims are a leading indicator of AIER and if the trend continues its upward trajectory, it could be an early warning.

However, the overall low level of applications, combined with the large number of open positions, indicates that the job market remains very tight. A tight labor market remains one of the strongest parts of the economy, supporting consumer spending. However, persistent price increases are affecting consumer attitudes and may start to dampen consumer spending despite a strong labor market.

Labor shortages and employee turnover, as well as shortages of materials, logistics problems and disruptions in supply chains, are likely to continue to dampen production growth in the economy and put upward pressure on prices. The outlook remains highly uncertain.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 after over 25 years of economic and financial market research on Wall Street. Bob previously led the Global Equity Strategy division of Brown Brothers Harriman, where he developed an equity investment strategy that combines macro downside analysis with upside fundamentals.

Prior to joining BBH, Bob was Senior Equity Strategist at State Street Global Markets, Senior Economic Strategist at Prudential Equity Group, and Senior Economist and Financial Markets Analyst at Citicorp Investment Services. Bob holds an MA in Economics from Fordham University and a BA in Business from Lehigh University.

Get notified of new articles from Robert Hughes and AIER.