Jobless Claims Hover Near 10-Month High, Possibly Due to School Year End

Last updated: June 20, 2024

one_dollar_on_the_tableJobless claims in the U.S. remain low, but signs of labor-market stress may be emerging. The latest figures show that while new unemployment claims dipped slightly last week, they stayed close to a 10-month high.

This spike might be linked to the end of the school year.

New claims fell to 238,000 from the previous week’s 243,000, the government reported Thursday. Two weeks ago, claims hit their highest level since August 2023.

Historically, jobless claims surge at the end of the school year. This pattern seems to be repeating, with states like Minnesota allowing certain education workers to apply for benefits during the summer break.

Labor demand has cooled a bit, hinting at early signs of stress in a strong labor market. Economists suggest it will take another month of data to understand the trend better.

Economists polled by the Wall Street Journal had forecast new claims to total 235,000 for the week ending June 15, based on seasonally adjusted figures.

Key details reveal that new jobless claims fell in 38 out of 53 states and territories, while rising in 15 others, notably Connecticut. Without seasonal adjustments, actual new claims dropped to 227,212 from 236,046 the previous week.

For comparison, actual claims were significantly higher, at 249,813, during the same week in 2023.

Meanwhile, the number of people already collecting unemployment benefits rose by 15,000 to 1.83 million, the highest since January. This rise in continuing claims suggests it’s taking longer for people who lose jobs to find new ones.

The big picture shows many economists anticipating layoffs as high interest rates and lingering inflation slow the economy and curb labor demand. However, the labor market has shown remarkable resilience so far.

It remains unclear whether the recent rise in new jobless claims is part of a larger trend or just a seasonal bump.

Looking ahead, U.S. economist Thomas Simons of Jefferies noted, “We are cautiously watching the next few weeks’ worth of data to see if a trend is emerging.”

Stephen Stanley, chief economist at Santander Capital Markets, added, “It appears that the jump in initial claims reflects school system employees filing at the end of the school year. Rules appear to vary from state to state, as filings have mainly jumped in Blue states, where rules for collecting benefits tend to be more liberal.”

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