Initial claims for regular state unemployment insurance fell 2,000 for the week ending June 25, coming in at 231,000. The previous week’s 233,000 was revised up from 229,000 (see first chart). By long-term historical comparison, initial claims remain very low but have increased significantly since hitting a low of 168,000 for the week ending April 1, 2022.
The four-week average rose for the fourth consecutive week and eleventh time in the last twelve weeks, coming in at 231,750, up 7,250 from the prior week and at the highest level since November 26, 2021. Weekly initial claims data continue to suggest a very tight labor market, though the recent upward trend is a growing concern.
The number of ongoing claims for state unemployment programs totaled 1.286 million for the week ending June 11, a rise of 17,836 from the prior week (see second chart). State continuing claims have now risen in three consecutive weeks and four of the last five weeks though the level remains very low (see second chart).
The latest results for the combined Federal and state programs put the total number of people claiming benefits in all unemployment programs at 1.314 million for the week ended June 11 versus 1.297 million in the prior week. The latest result is the 18th week in a row below 2 million.
Initial claims remain at a very low level by historical comparison, but recent weeks have seen an upward trend become more apparent. Weekly initial claims for unemployment insurance is an AIER leading indicator, and if the trend continues on an upward trajectory, it may be an early warning sign.
Still, the overall low level of claims combined with the high number of open jobs suggests the labor market remains very tight. The tight labor market remains one of the strongest parts of the economy, providing support for consumer spending. However, persistent price increases are weighing on consumer attitudes and may be starting to restrain consumer spending despite the strong labor market.
Labor shortages and turnover, along with materials shortages, logistical issues, and supply chain disruptions are likely to continue to hamper the growth in production across the economy and sustain upward pressure on prices. The outlook remains highly uncertain.
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