- Initial claims for unemployment insurance increased by 2,000 to 232,000 in the week ending May 27. The four-week moving average of initial claims fell to 229,500 from 232,000.
- Continuing claims increased by 6,000 to 1,795,000 in the week ending May 20.
- The labor market is cooling but labor demand remains too strong.
Initial claims for unemployment insurance (UI) increased by 2,000 to 232,000 for the week ending May 27 from 230,000 (revised up from 229,000) in the previous week, according to data from the U.S. Department of Labor. The four-week moving average of claims, which smooths out some of the weekly volatility fell to 230,000 in the week ending May 27 from 232,000. Weekly claims are up from exceptionally low levels throughout 2022 which sometimes dipped below 200,000 per week.
Continuing claims rose by 6,000 to 1,795,000 in the week ending May 20 from 1,789,000 (revised down from 1,794,000). The four-week moving average of continuing claims fell by 1,500 to 1,797,500. The insured unemployment rate held steady at 1.2% in the week ending May 27, a record low. The highest insured unemployment rates in the week ending May 13 were in California (2.2), New Jersey (2.1), Massachusetts (2.0), New York (1.6), Oregon (1.6), Puerto Rico (1.6), Alaska (1.5), Rhode Island (1.5), Washington (1.5), and Illinois (1.4).
The JOLTS release yesterday showed that the number of job openings surged in April to 10.1 million from an upwardly revised 9.75 million in March. The consensus expectation was for a decrease to 9.4 million. The surge in April was driven by a rise in job openings in retail, transportation and warehousing, and healthcare industries. The job openings rate rose to 6.1% in April from 5.9% in March. Despite the increase in job openings in April, job openings are down by over 1 million this year. The separations rate and the quits rate both edged down; the separations rate dropped to 3.7% from 3.9% while the quits rate fell to a more than two-year low of 2.4% from 2.5%. In a separate report released today by ADP, private employment grew stronger than expected in May.
Despite the surge in job openings in April and stronger-than-expected growth in private employment in May, other broad labor market indicators suggest that the U.S. labor market is cooling. Job growth averaged 222,000 over the last three months to April, down from around 300,000 at the end of 2022. Initial claims are up this year from very low levels in 2022. PNC Economics expects job growth of 190,000 for the May BLS jobs report, to be released tomorrow. Job growth will likely slow further in the coming months as high-interest rates and slower economic growth take a toll on hiring, creating better alignment in the U.S. labor market.
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