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Unemployment Up Even With Tight Labor Market

Jobless Claims

Even with the record number of job openings unemployment filings are still above where we were before the pandemic.

By the numbers: Initial jobless claims rose by 7,000 to 251,000 in the week ending July 16, according to the Labor Department.

The four-week average for jobless claims, which smooths out volatility, rose to 240,500, the highest since last December. 

Why it matters: This data can be volatile, but it’s also where early signs of any labor market shift will appear. That may be the case now, as the job market transitions from on fire to just hot.

To be clear, claims remain at historically low levels, and by no means are consistent with what’s been seen during previous recessions.

But jobless filings — one proxy for job cuts — have been ticking up as more firms announce job cuts, especially in sectors like housing, tech and crypto.

The bottom line: Laid-off workers still have favorable conditions for finding new jobs. “Job postings are still extremely high. Some employers have probably started slow-walking hiring decisions, but others who are more confident about their business’s prospects are still eager to fill open slots,” Bill Adams, chief economist at Comerica Bank, wrote in a note today.

Axios Macro By Neil Irwin and Courtenay Brown · Jul 21, 2022