A man walks past a “We’re Contracting” sign posted outside a restaurant in Arlington, Virginia on June 3, 2022.
Olivier Douliery | AFP | Getty Images
Initial unemployment claims have risen to their highest level since mid-January last week despite signs of an otherwise strong employment picture, the Labor Department said on Thursday.
First-time applications for the week ended June 4 were 229,000, up 27,000 from the revised upward level of the previous period and well ahead of the Dow Jones estimate of 210,000. The covered period includes Memorial Day vacation; seasonal adjustments would normally lead to a higher number.
The last time the initial claims were so high was on January 15th.
However, ongoing claims, which are one week behind the headline number, remained unchanged at just over 1.3 million, below the FactSet estimate of 1.35 million.
The four-week moving average for ongoing claims, which explains the volatility of the figures, fell slightly to 1.32 million, the lowest level since January 10, 1970.
The rise in claims comes less than a week after the Bureau of Labor Statistics reported that non-farm payrolls rose by 390,000 in May, considerably better than expected.
Companies have continued to contract despite growing concerns that the U.S. economy could be heading for a shallow recession as inflation rises and global supply chains continue to be blocked.
The Federal Reserve is in the early stages of a cycle of rate hikes aimed at reducing inflation to around 40-year highs. Fed officials hope to slow the labor market without causing an increase in the unemployment rate, which stands at 3.6% and close to its lowest level since 1969.