Third Consecutive Week Of Higher-Than-Expected Unemployment Claims: Is US Job Market Losing Steam?

The long-standing resiliency and tightness of the U.S. job market is starting to show the first signs of cooling.

The most recent Department of Labor data reported a slightly higher-than-anticipated increase in initial unemployment claims for the previous week, which remained stable from a revised higher 264,000, surpassing the projected 260,000.

This marks the third consecutive week of higher-than-expected unemployment claims, signaling some deterioration in labor market strength. Such a tendency would be consistent with the latest Fed remarks, which said that a period of below-trend growth and softer labor market conditions is required to return inflation to the 2% target.

Also Read: Sanders Pushes To End Pentagon’s ‘Wasteful Spending’ With New Bill: ‘Each Year, Auditors Find Billions In … Couch Cushions’

Key Takeways From Last Week's US Unemployment Claims

• Initial jobless claims came in at 264,000 for the week ended June 17, unchanged from a revised higher level of 264,000 the prior week and slightly above expectations of 260,000.
• The four-week moving average for jobless claims, which eliminates week-to-week variability, rose from a revised higher level of 247,250 to 255,750, above the expected 242,000. 
• Continuing jobless claims for the week ended June 10 fell from 1,772,000 to 1,759,000, below than the forecasted 1,782,000.
• Notable increases in jobless claims were reported in California, up 55,386, Texas, up 28,393 and Ohio, up 15,803.

Market Reactions: Dollar Steady, Stocks Trend Down

Following the initial jobless claims release, the U.S. dollar index, tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), held steady for the day. Futures contracts on the S&P 500 index were 0.2% lower at 08:42 EDT, recovering some ground in the premarket.

Treasury yields remained unchanged, with the 2-year yield at 4.74% and the 10-year yield at 3.74%. Traders currently assign a 72% chance of a Fed 25-basis-point rate hike in July.

Read more: US Stock Futures Signal Slippery Slope Ahead As Traders Brace For Powell’s Senate Testimony: Analyst Says ‘Don’t Fight The Fed’