The numbers: A small drop in the number of Americans applying for unemployment benefits was seen last week, but the number of new jobless claims stayed close to a 10-month high. This may have something to do with the end of the school year.
The number of new claims dropped from 243,000 the week before to 238,000, the government said Thursday. Two weeks ago, there were more claims than at any time since August 2023.
Last year, a lot of new jobless claims came in after school ended. This may be happening again. In some states, like Minnesota, people who work in education can apply for benefits after school is over.
But there isn’t as much need for workers now, so it’s also possible that a strong job market is beginning to show signs of stress. Economists say they won’t have a better idea until they see more jobless claims in a month.
Based on seasonally adjusted numbers, economists polled by the Wall Street Journal thought that there would be 235,000 new claims in the seven days ending June 15.
To sum up, the number of new jobless claims went down in 38 of the 53 states and territories that send these numbers to the federal government.
In 15 other states, claims went up, most notably in Connecticut.
Taking into account changes caused by the seasons, the number of new claims actually fell from 236,046 the week before to 227,212 last week.
In contrast, 249,813 real jobless claims were made in the same week in 2023, which is a lot more.
The government said that the number of people already getting unemployment benefits in the U.S. went up by 15,000 to 1.83 million.
This level of “continuing claims” is the highest it has been since January. This means that it’s taking longer for people who lose their jobs to find new ones.
Big picture: A lot of economists think that there will be more layoffs because the economy is slowing down because of high interest rates and persistent inflation.
Still, the job market has been surprisingly strong so far. It is still too early to tell if the recent rise in new jobless claims is part of a trend or just a normal springtime spike.
In the future: To see if there is a trend, U.S. economist Thomas Simons of Jefferies wrote in a note to clients, “We are cautiously watching the next few weeks’ worth of data.”
“It looks like the rise in initial claims is due to school employees filing at the end of the school year,” said Stephen Stanley, chief economist at Santander Capital Markets. “Seems like rules are different in each state; most of the increases in filings have been seen in blue states with more lax rules for getting benefits.”
The Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) both went up on Thursday.
