Initial jobless claims rose more than expected, and continuing claims hit a new three-year high, according to the latest data from the Department of Labor. Both data points underscore a cooling labor market.
Initial Claims: The advance figure for seasonally adjusted initial jobless claims reached 243,000 for the week ending July 13, an increase of 20,000 from the previous week’s revised level and the highest level in six weeks.
- The 4-week average of initial claims edged up to 234,700, continuing a five-week trend of remaining above the 230,000 mark. This pattern was last observed in late August 2023.
Continuing Claims: While there could be a calculation error or a seasonal trend impacting these figures, unlike last year, continuing claims have not shown signs of stabilization. The advance number for seasonally adjusted insured unemployment for the week ending July 6 rose to 1,867,000, an increase of 20,000 from the previous week’s revised level. This is the highest level seen since November 2021.
Bottom Line: The steady climb in both initial and continuing claims indicates a cooling labor market, which could potentially provide the Federal Reserve with the justification needed for a rate cut in September. Economic observers will be closely monitoring these trends, as a softer labor market might influence the Fed’s monetary policy decisions in the coming months.
