Continued Decrease in Initial Jobless Claims Amid Mixed Labor Market Signals
Initial jobless claims have been consistently hovering within the same range for the past three years. Unadjusted claims are nearing record lows, coinciding with the Federal Reserve's decision to cut rates in the wake of a near-record revision to payrolls. It seems as though one sector of the Department of Labor, responsible for initial claims reports, is not in sync with the other sector that handles payrolls and revisions.
Decline in SA and NSA Claims
The decline in seasonally adjusted (SA) and not seasonally adjusted (NSA) claims seems to be driven by the normalization of Texas claims post-Beryl. The weekly change in claims, when broken down by state, doesn't show any significant outliers for the week.
Continuing Jobless Claims at Highest Since November 2021
Despite the decrease in initial jobless claims, continuing jobless claims remain at their highest since November 2021. This raises questions about the attention given to initial claims to support bullish narratives.
Implications for the Federal Reserve
With the focus on initial claims, it's puzzling how the Federal Reserve can then pivot and cut rates to 'save the labor market' before it's too late.
Bottom Line
The labor market continues to send mixed signals, with initial jobless claims decreasing but continuing jobless claims remaining high. How can the Federal Reserve justify cutting rates to 'save the labor market' in this context? What are your thoughts on this situation? Feel free to share this article with your friends and discuss. Also, don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
