Another 243,000 people filed new unemployment claims in the latest week, marking an increase of 20,000 from the previous week and tying the highest level since early June. Continuing Claims also rose by 20,000, as 1.867 million people are still receiving benefits after filing their initial claim.
What’s the bottom line? The pace of layoffs continues to move higher, as does the number of people who are already collecting benefits. Plus, this latest Initial Jobless Claims reading was an important real-time report because it includes the sample week that the Bureau of Labor Statistics will use in the modeling for their job growth estimates for July’s Jobs Report. While this is just one component, the high reading of 243,000 initial unemployment claims could point to weaker job growth when July’s report is released on August 2.
There have been growing calls for the Fed to cut their benchmark Fed Funds Rates at their meeting on September 18, given signs of cooling inflation, rising unemployment and a softening job market. Labor sector data released between now and then will play a pivotal role in this decision.