The number of Americans filing for unemployment benefits surged last week, reaching levels not seen since November 2021. The Department of Labor reported on Thursday that new jobless claims rose by 20,000, hitting 243,000.
This unexpected increase was partly driven by a significant rise in claims from Texas, attributed to the impact of Hurricane Beryl. Despite this spike, unemployment claims are still considered low by historical standards, although they have been climbing in recent months, indicating a potential cooling of the labor market.
Jobless claims are often used as a proxy for layoffs, and the recent uptick suggests that more Americans are facing job losses. To get a clearer picture of the labor market’s health, economists prefer to look at the four-week moving average of claims, which smooths out weekly volatility. This average rose by 1,000 to 234,750.
In addition to new claims, continuing claims, which represent the number of people still receiving unemployment benefits after an initial week of aid, also saw an increase. Continuing claims rose by 20,000 to 1,867,000, marking the highest level since November 2021.
The rise in continuing claims suggests that those who have lost their jobs are finding it more challenging to secure new employment. This trend could be a sign of a broader slowdown in the labor market, which has been resilient in the face of economic uncertainties.
As the labor market shows signs of softening, policymakers and economists will be closely monitoring these indicators to gauge the overall health of the economy and to determine if further intervention or support measures are needed.