• Initial claims for unemployment insurance were unchanged in the week ending June 17 at 264,000. 

• The four-week moving average of initial claims rose to its highest level since November 2021. 

• Continuing claims have fallen over the past couple of months. 

• The labor market remains strong, but will deteriorate later this year because of higher interest rates.

Initial claims for unemployment insurance were 264,000 in the week ending June 17, according to the Department of Labor. This was the same level as in the preceding week (revised slightly higher from 262,000). The four-week moving average of claims, which smooths out some of the volatility, was 256,000 in the week ending June 17, up from 247,000 the prior week (after revisions). This is the highest level for the four-week moving average since November 2021, when the labor market was still recovering from the pandemic. 

Continuing claims were 1.759 million in the week ending June 10, down by 13,000 from the previous week. The four-week moving average of continuing claims was 1.770 million, down by 7,5000 from the previous week. 

Initial claims for unemployment insurance have moved gradually higher throughout 2023; they started the year at around 200,000, a very low number. Even with the increase this year initial claims remain quite low on a historical basis, and it is not yet clear if the increase in claims in 2023 is simply the result of a bit more slack in the labor market, or if it is a harbinger of bigger layoffs and an impending recession. Continuing claims have declined slightly over the past couple of months, after rising slightly in late 2022 and early 2023, suggesting that those who lose their jobs are quickly finding new ones. Job growth remains strong, with the U.S. economy adding more than 280,000 jobs per month on average through May, well above the long-run trend. The unemployment rate was 3.7% in May, up from a more than 50-year low in April of 3.4%. 

PNC expects a recession to start in late 2023 or early 2024 as the impact of higher interest rates continues to work its way through the economy. The Federal Reserve is signaling that further increases in the fed funds rate are coming, notwithstanding the Federal Open Market Committee’s pause in the tightening cycle at their meeting last week. Both initial and continuing unemployment insurance claims are set to increase in the second half of 2023 as tighter monetary policy becomes an increasing drag on the economy.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance, and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.