By the numbers: Initial claims down, but continuing claims increased again
Initial jobless claims edged lower last week, easing to 227,000 from an unchanged 229,000 for the week ended May 17.
The four-week moving average rose modestly to 231,500, reflecting just a modest nudge upward from 230,500 the preceding week.
Continuing claims posted a more notable increase, topping 1.9 million for the week ended May 10, a 36,000 increase from the preceding week’s 1.867 million. Over the past year, continuing claims have risen by 110,000.
Fewer job openings and measured hiring, but limited layoffs
Labor conditions have eased by some measures, but first-time jobless claims have held relatively firm this year. That was evident again in last week’s data.
The combination of DOGE-related federal government job cuts and the announcement of unexpectedly significant tariffs was a gut punch to business, consumer, and investor sentiment in recent months, creating significant concerns about the near-term economic outlook.
That tide has turned a bit, as implementation delays and tangible progress in trade negotiations have alleviated those concerns since mid-April, lifting some of the cloud that had hung over the stock market and dimmed growth expectations.
Job openings have declined, and hiring has slowed, but there’s still little indication that employers are slashing jobs.
Bottom line? Labor market supportive, but higher prices remain a near-term growth risk
The economy isn’t out of the woods by any means, but the resiliency of labor data remains a comparative bright spot. Job creation is a critical underpinning to household consumption, one that has proven to be enough to support solid results since the beginning of the year.
That doesn’t mean that household spending growth in real terms will be sustained, as the early impact of tariffs on a range of imported goods becomes increasingly apparent.
Real consumption faces a stiff headwind from higher prices; that reality will challenge consumers in both their willingness and ability to spend in the coming months.
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