The numbers: New filings for unemployment benefits fell by 3,000 last week to 229,000, but they remained close to a five-month high, perhaps a sign that layoffs have increased slightly from record-low levels.
Economists polled by the Wall Street Journal forecast initial jobless claims to total 220,000 in the seven days ended June 11. The figures are seasonally adjusted.
Last week new filings jumped to 232,000, the highest mark since January. The increase appeared to stem from seasonal quirks tied to the Memorial Day holiday. Holidays can sometimes produce sharp swings in the claims figures.
It’s unclear if there was any residual effect from the holiday in the latest claims figures, economists say, or if the upturn reflects some erosion in the labor market.
“The recent move up bears watching to see if it develops into an early signal of developing cracks in the demand for labor or if it just turns out to have been statistical noise related to seasonal adjustment difficulties,” said chief economist Joshua Shapiro of MFR Inc.
The four-week average of new jobless claims, which smooths out the temporary ups and downs, rose to 218,500 from 215,750. That’s also the highest level since January.
Big picture: Job openings are high and layoffs are low, but the prospect of a slowing economy could cast a chill on a sizzling labor market later this year.
The Federal Reserve plans to rapidly raise interest rates to try to tame high inflation. The rising cost of borrowing could dampen U.S. growth and even tip the economy into recession if the central bank goes too far.
Key details: Raw or actual jobless claims showed a surprisingly large increase and hit the highest level since early February.
New claims rose the most in California, Pennsylvania and Illinois. Thirty-six of the 53 states and U.S. territories that report jobless claims showed increases, the most since early April.
The only state to report a big drop in new claims was Missouri.
The number of people already collecting unemployment benefits, meanwhile, rose by 3,000 to 1.31 million. These so-called continuing claims are at the lowest level in 53 years, however.
Looking ahead: “While the level of claims remains low, and the overall labor market remains extremely tight by historic standards, the latest data suggest that some sectors may be experiencing a modest uptick in layoffs amid rising concerns over inflation” and the economic outlook, said U.S. economist Mahir Rasheed of Oxford Economics,