- Initial claims for unemployment insurance decreased by 16,000 to 230,000 in the week ending April 22nd
- The four-week moving average of initial claims was down by 4,000 to 236,000
- Continuing claims decreased by 3,000 to 1,858,000 in the week ending April 15th
- Unemployment insurance claims are holding steady at higher levels than were seen throughout 2023 and face more upward pressure in the months to come
Initial claims for unemployment insurance (UI) decreased by 16,000 to 230,000 for the week ending April 22nd. This is down from a modestly revised prior week’s result of 246,000 (+1000 revision). Weekly claims are up from exceptionally low levels throughout 2022 which sometimes dipped below 200,000 per week. However, a new plateau in the initial claims results does seem to have formed just below 250,000. 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 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. PNC continues to forecast that the Federal Reserve will tighten monetary policy with one further 25 basis point interest rate increase out of the Federal Open Market Committee (FOMC) meeting ending on May 3rd. The subsequent pause will provide one less complicating factor in evaluating the full impact of last year’s rapid monetary policy tightening pace on labor markets, layoffs, and consumer demand.
The four-week moving average of claims, which smooths out some of the weekly volatility, was down by 4,000 to 236,000. Initial claims have been consistently elevated for long enough now that the four-week moving average now also reflects an increase from the sub-200K results that had been the lowest observed for UI claims since the data began in the late 1960s. U.S. labor markets continue to experience exceptionally tight conditions, but the now-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.
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.
