The US Department of Labor came out with its weekly unemployment numbers on Thursday.
New claims went up by 11,000 to 235,000 for the week ending August 16, the highest in about two months, and a bit more than what economists expected.
The four-week average edged up to 226,500, showing that layoffs have been creeping up slowly. People already on benefits also went up by 30,000, hitting almost two million, the most since late 2021.
The numbers display that things are slowing down in the labor market, but it’s still holding up pretty well.
The fact that more people are staying on benefits shows hiring isn’t super strong right now, kind of a sign the market is in transition with all the economic uncertainty around.
Job growth has slowed, which matches the recent tweaks to payroll numbers from the Bureau of Labor Statistics, but overall, claims are still low compared to historical levels.
Federal employee claims, which people have been watching after some recent government layoffs, went down a bit, giving a mixed picture of what’s really happening.
Market reaction to jobless claims data
Jobless claims in the US crept higher this week, and both investors and policymakers are keeping a close eye.
The numbers suggest the labor market could be slowing, but there’s no big spike in layoffs yet. Economists are still cautiously optimistic that growth can hold.
The Fed won’t be taking this lightly, if claims keep rising, it could force a rethink of their interest rate plans aimed at taming inflation.
Claims are still hovering between 200,000 and 250,000 each week, a range that’s been considered fairly normal since the post-pandemic recovery.
Some analysts see this as part of a broader, ongoing shift in the job market like changing participation rates, sector-by-sector adjustments, that kind of thing.
Markets didn’t swing wildly, but sentiment leaned cautious. Investors are balancing concerns about consumer spending, corporate profits, and inflation, all while keeping an eye on global economic pressures.
With the Jackson Hole symposium just around the corner, the timing of this report adds another layer of intrigue as any clues about the labor market could shape expectations for what the Fed does next.
Looking ahead, jobless claims are expected to bounce around near current levels. Some economists think we could see them drift down to about 210,000 by 2026, assuming the labor market steadies.
But continuing claims are creeping up, which suggests the market might soften a bit more before any real recovery sets in.
All told, the data shows a market that’s holding its ground, but not without stress.
For policymakers and business leaders, it’s a reminder to stay alert as things could shift quickly, and this delicate phase of the economy leaves little room for complacency.
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