Weekly claims for unemployment benefits remained at their highest level in eight months during the first full week of June while the number of Americans filing for unemployment insurance on an ongoing basis reached the highest level since November 2021.
Data from the Department of Labor released Thursday morning showed 248,000 initial jobless claims were filed in the week ending June 7, flat from the week prior and above economists’ expectations for 242,000.
Meanwhile, 1.956 million continuing claims were filed, up from 1.902 million the week prior and the highest level seen since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs.
The data’s release comes as the US labor market continues to show signs of slowing.
“Continuing jobless claims keep rising to fresh highs,” Renaissance Macro head of economics Neil Dutta wrote in a note to clients on Thursday morning. “This means unemployment is going up. Initial claims have perked up but remain tame by comparison. Taken at face value, it implies that rates of hiring have declined even if rates of firing have not materially increased.”
Read more: Do you pay taxes on unemployment?
Other recent data has shown signs of a slowly cooling labor market as hiring slows. The US economy added 139,000 nonfarm payrolls in May, below the 177,000 added in April. Revisions to prior reports revealed 95,000 fewer jobs were added in April and March than initially thought. Meanwhile, ADP data showed the private sector added 37,000 jobs in May, the lowest monthly total in more than two years.
The labor data, combined with recent inflation reports that have shown price increases cooling, has heated up debate on when the Federal Reserve may cut interest rates next.
Traders are now betting there is a 25% chance the Fed cuts rates at least once by the end of its July meeting, up from a 19% chance seen a day ago, per the CME FedWatch Tool.
Dutta said, “Because uncertainty is high and the Fed is waiting, the scale of the policy mistake could be that much larger if inflation fails to turn up the way they assume!”
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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