Job Market "Historically Healthy"

 

Thanks again, Bidenomics!

Fewer Americans applied for unemployment benefits last week with the labor market continuing to cruise along despite higher interest rates intended to cool hiring.

U.S. applications for jobless claims fell by 9,000 to 228,000 for the week ending July 15, from 237,000 previous week, the Labor Department reported Thursday.

The four-week moving average of claims, which evens out some of the weekly volatility, fell by 9,250 to 237,500.

Jobless claim applications are viewed as reflective of the number of layoffs in a given week.

For three weeks in late May and early June, jobless claims had appeared to reach a sustained, higher level, above 260,000. But the past four weeks, claims have retreated and the labor market remains historically healthy.

Since more than 20 million jobs vanished when the COVID-19 pandemic hit in the spring of 2020, U.S. employers have added jobs at a blistering pace, more often than not beating forecasts. Despite the fastest interest rate hikes since 1989, the unemployment rate has hardly budged and remains historically low at 3.6%...  (our emphasis)

Oh, and inflation?

...consumer prices fell to their lowest level since early 2021 — 3% in June compared with a year earlier — and much closer to the Fed’s target of 2%.

Now, if we could just get Republican Fed Chair Powell and his fusty Federal Reserve Board to forego a possible half point rate hike later this year, the saying "if it ain't broke, don't fix it" might actually be proved out.

Unemployment Claims Down Again

A "bright spot":

New unemployment claims improved more than expected last week, further reflecting a tight labor market and relatively low levels of firings and layoffs.  [snip]

• Initial jobless claims, week ended March 12: 214,000 vs. 220,000 expected, 227,000 during prior week

• Continuing claims, week ended March 5: 1.419 million vs. 1.480 million expected, 1.494 million during prior week

Jobless claims came in below 250,000 for a seventh consecutive week and hovered around pre-pandemic levels. And at 214,000, initial claims were at their lowest level of 2022.

Continuing claims, which track the total number of individuals claiming benefits across regular state programs, have held well below levels from even before the pandemic, coming in under 1.5 million for four consecutive weeks now. Throughout 2019, continuing claims averaged around 1.7 million per week.

The labor market has remained a bright spot in the U.S. economy, especially as a brief hit from the Omicron variant earlier this year unwound further in the most recent economic data.

Taken together, the weekly jobless claims data, monthly jobs reports and other surveys have shown an economy with near-record levels of job openings and a labor force participation rate that has steadily begun to creep back toward pre-virus standards.

The Fed just raised the Federal funds interest rate by 0.25% yesterday, the first of several rate increases expected over the next year.  The Fed's action is an attempt to blunt rising inflation, which is rising worldwide, mostly caused by pent-up consumer demand chasing supply- chain- limited goods, volatility in energy markets, and good old fashioned corporate profiteering.