US jobless claims rise by the most in nearly a year as recession fears abound

The number of Americans filing for unemployment benefits rose by the most in nearly a year as 27,000 submitted jobless claims during the week that started with Memorial Day — adding to fears that the economy is sliding.

The Labor Department said that a total of 229,000 applications were filed during the seven-day period that ended June 4.

For the week that ended May 28, 1.3 million people continued receiving unemployment benefits.

The four-week moving average of initial claims, which is closely followed as a way to track the trend in the sometimes volatile weekly claims data, rose 8,000 to 215,000 and was the highest since early February.

“The labor market is cooling a bit after running extremely hot into early 2022,” Bill Adams, the chief economist for Comerica Bank, told The Post.

“Initial claims for unemployment insurance are still extremely low, but they are up by 63,000 from their March level, which was the lowest in over half a century.”

Adams added: “Job postings have also pulled back somewhat, another sign that the job market is getting less red hot.”

In the week that started on Memorial Day, the number of initial jobless claims rose by 27,000 to 229,000 nationwide.
Corbis via Getty Images

Analysts in recent weeks have indicated that they were fearful the US economy could be in for a recession.

But Adams said that the latest jobless numbers don’t necessarily justify those fears.

“While the rise in initial claims looks meaningful, it is not necessarily a sign of recession,” he said.

He said that the four-week moving average of initial claims rose by the same amount in 2019, 2017, and 2013.

Adams cited “other cyclical indicators, like the differential between short-term and long-term interest rates” which “point to continued economic expansion, albeit at a slower pace than in 2021.”

The increase in the number of jobless claims adds to concerns over a possible recession.
The increase in the number of jobless claims adds to concerns over a possible recession.

He said the economy was being slowed down by “headwinds” caused by the Russian invasion of Ukraine, soaring levels of inflation, the Fed’s raising of interest rates, and Chinese lockdowns caused by the ongoing COVID-19 pandemic.

Last week, the Labor Department released data indicating that US companies added 390,000 jobs in May — extending a streak of solid hiring.

While unemployment remains low, there are still worries about the state of the US economy.

Earlier this week, Elon Musk told Tesla employees that he has a “super bad feeling” about the economy.

Musk’s gloomy outlook echoes recent comments from executives including JPMorgan Chase CEO Jamie Dimon and Goldman Sachs President John Waldron.

A “hurricane is right out there down the road coming our way,” Dimon said last week.

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