• Initial claims for unemployment insurance were unchanged at 262,000 in the week ending June 10. The four-week moving average of initial claims increased by 9,000 to 247,000.
• Continuing claims increased by 20,000 to 1,775,000 in the week ending June 3 but the 4-week moving average fell by 6,000 to 1,778,000.
• Unemployment insurance claims are holding steady at higher levels than were seen throughout 2022 and face more upward pressure in the months to come

Initial claims for unemployment insurance (UI) held steady at 262,000 in the week ending June 10, after a 29,000 jump in the previous week. The four-week moving average of claims, which smooths out some of the weekly volatility, increased by 9,000 to 247,000. A new plateau in the initial claims seems to have formed at close to 245,000. This four-week moving average level of Initial claims reflects an increase from the sub-200K level that had been the lowest observed for UI claims since the data began in the late 1960s. Weekly claims are up from exceptionally low levels throughout 2022 which sometimes dipped below 200,000 per week.

Continuing claims increased by a large 20,000 to 1,775,000 in the week ending June 3. The four-week moving average of continuing claims decreased by 6,000 to 1,778,000. The insured unemployment rate held steady at 1.2% in the week ending June 3, a record low.

Job losses have begun to spread from the tech and finance industries that had dominated headlines through the end of last year and into the first five months of 2023. Headline-grabbing layoff announcements, however, typically take some time to be put into effect. This delay accounts for the recent rise in initial claims, based upon high-profile layoff announcements over that spanned the transition from 2022 into 2023. This effect could also portend another escalation in the months to come, alongside the ever-widening net of jobs cuts spreads across industries.

As expected, the FOMC played “hopscotch” by “hopping, skipping or jumping” over a rate hike at yesterday’s meeting. A small 0.1% rise in the May headline CPI reinforced the FOMC’s decision to hold tight. But the FOMC clearly signaled that two 25 bp rate hikes are their most likely forecast in the latter half of the year. Chair Powell said this “pause” will provide more time in evaluating the full impact of the past year’s rapid monetary policy tightening on labor markets, economic growth, and tightening financial condition. U.S. labor markets continue to experience exceptionally tight conditions, but the sustained increase in UI claims and potential further uptrend as a result of spreading layoff announcements could be the first steps along a path to more balanced labor market conditions.

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