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Initial jobless claims rise to the highest level since August

REAL ECONOMY BLOG | May 09, 2024

Authored by RSM US LLP

Initial jobless claims rose by 231,000, the highest level since August, for the week ending May. 4 partly because of a one-time surge in New York as school vacations began.

At the same time, new filings rose in many other states as well in a sign of rising layoffs and a cooling labor market.

But the increase is just one data point and will not prompt any immediate reaction in the market or with the Federal Reserve.

Jobless claims

Initial claims from New York rose by more than 10,000 on a non-seasonally adjusted basis last week. In recent years, the spikes in new claims from New York have often taken place around the second week of April. The delay this year for filings pushed up the top-line figure, which is adjusted for seasonal fluctuations, by 22,000.

Major states like California, Texas and Pennsylvania also posted increases in new filings, suggesting some softening of the labor market.

Initial jobless claims

Our preferred metric of new claims—the 13-week moving average—rose slightly to 211,000, still below the pre-pandemic level.

Even as claims remain muted, it is important to keep monitoring the series closely as it is one of the most reliable leading indicators to predict the turn of the labor market.

Underneath the top-line number, continuing claims rose the week ending April. 27 to 1.785 million from 1.768 million, the first increase in April.

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This article was written by Tuan Nguyen and originally appeared on 2024-05-09.
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