U rate dips back to 0.9%.

Initial claims for unemployment insurance fell by 2,000 to 231,000 in the week ending June 25 from an upward revised 233,000 in the week ending June 18. The four-week moving average of initial claims, which smooths out some of the volatility, moved up 7,000 to 232,000 in the week ending June 25. It hit a low of 172K in early April.  The insured unemployment rate dipped to a very low 0.9 percent in the week ending June 18 from an upward revised 1.0 percent in the prior week.                                                                            

The total number of people receiving benefits under regular state unemployment insurance programs (continuing claims) edged down by 3,000 to 1.328 million in the week ending June 18 from an upward revised level of 1.331. The four-week moving average of continuing claims rose 6,000 to 1.320 million. Continuing claims are at decades-long lows as unemployed workers leave the program’s rolls, either because their benefits have expired or because they have quickly found a new job. After peaking at more than 23 million in May 2020, state continuing claims have now moved to their lowest levels since the beginning of 1970.

The labor market remains in solid shape as the spring quarter ends but the rise in initial claims since early April is a cool breeze blowing at the hot labor market this summer. If the recent uptick in the 4-week moving average of initial claims to 232K moves up to over 250K, that would be a clear sign that layoffs are happening at a growing number of companies and the unemployment rate is close to a low at 3.6 percent.

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