US Economy News Today: Initial Jobless Claims Jumped Last Week. Is It a Cause For Concern?

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Initial Jobless Claims Jumped Last Week. Is It a Cause For Concern?

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The number of people filing for unemployment insurance for the first time last week jumped, the latest indicator that the labor market may be downshifting.

Initial claims increased by 8,000 from the prior week to a total of 229,000, according to the Department of Labor. That was higher than the prior week’s total, which was revised higher to 221,000 and more than the 220,000 economists surveyed by the Wall Street Journal and Dow Jones newswires expected.

“Initial claims for unemployment insurance benefits won’t help calm financial market jitters that the labor market is weakening more than anticipated, but these seem premature and overdone,” wrote Oxford Economics’ Ryan Sweet.

Sweet noted that the weekly number is more volatile than usual around holidays and Memorial Day weekend may have skewed the numbers. The four-week moving average, which is often seen as a less volatile measure slightly decreased from the prior week.

All eyes will now turn to tomorrow’s employment report as reports this week showed job openings fell to their lowest number since 2021, private payroll growth slowed and layoffs were flat.

“Ironically, a slowing in the job market, and even an increase in unemployment, should be welcome to the extent that it alleviates some upward pressure on inflation—which we agree is what is the most important thing to focus on – but we are aware that too much weakness in the labor market and in the economy could eventually prove to be an even greater threat to markets than inflation that is 1%-2% above the Fed’s target,” wrote Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.