Unemployment claims are a lot lower in the past week, but unemployment is rising

The numbers: In the week ending June 25, initial unemployment claims fell by 2,000 to 231,000, the Labor Ministry said Thursday.

Economists polled by The Wall Street Journal had estimated the number of new claims would rise to 230,000 from last week’s original estimate of 229,000. That figure was revised to 233,000. The figures are seasonally adjusted.

Key details: The four-week average of new unemployment claims rose by 7,250 to 231,750. This is the highest level since December.

The number of people already receiving unemployment benefits fell by 3,000 to 1.33 million. These so-called persistent claims are now back at pre-crisis levels.

big picture: The underlying trend in claims has moved slightly higher. The number of new applications had fallen to 166,000 by the end of March.

The Fed wants to slow down the economy by raising key interest rates sharply to cool inflation. It remains uncertain how companies will respond. The number of layoffs could remain low if companies are reluctant to hire workers, given how difficult it is to find workers.

What do they say: “The damage level is still relatively low, but we do not expect the damage amount to be much lower than in recent weeks. While labor markets remain very tight, reports of layoffs are mounting,” said Nancy Vanden Houten, chief US economist at Oxford Economics.

Market response: Shares DJIA,
-1.61%

spx,
-1.60%
are expected to open lower Thursday on mounting fears of a recession. The return on the 10-year Treasury TMUBMUSD10Y,
3.029%
dropped to 3.04%.

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