U rate dips back to 0.9% in week of 7/1

Initial claims for unemployment insurance rose by 9,000 to 244,000 in the week ending July 9 from an upward revised 235,000 in the week ending July 2. The four-week moving average of initial claims, which smooths out some of the volatility, moved up 3,000 to 236,000 in the week ending July 9. It hit a low of 172K in early April.  The insured unemployment rate dipped to a very low 0.9 percent in the week ending July 2 from 1.0 percent in the prior week.                                                                          

The total number of people receiving benefits under regular state unemployment insurance programs (continuing claims) dropped by 41,000 to 1.331 million in the week ending July 2 from an upward revised level of 1.372 in the previous week. The four-week moving average of continuing claims rose 5,000 to 1.340 million. 

Continuing claims are at decades-long lows as unemployed workers leave the program’s rolls, either because their benefits have expired or because they have quickly found a new job. After peaking at more than 23 million in May 2020, state continuing claims have now moved to their lowest levels since the beginning of 1970. 

The labor market remains in solid shape as the summer quarter begins but the rise in initial claims since early April is a cool breeze blowing at the hot labor market this summer. If the recent rise in the 4-week moving average of initial claims to 236K moves up to over 250K, that would be a clear sign that layoffs are happening at a growing number of companies and the unemployment rate is close to a low at 3.6 percent.

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.