The U.S. is in the midst of a strange economic landscape – high inflation and slowing growth paired with a robust labor market. Evidence of cracks in the jobs market are hard to find but recently many have been pointing to initial unemployment claims. In July, initial jobless claims – a proxy for layoffs – have been steadily ticking up.
For the week ending August 6, seasonally adjusted initial claims were up by 14,000, to 262,000. The previous week’s seasonally adjusted numbers were revised down from 260,000 to 242,000. Economist Mark Zandi noted that seasonally unadjusted UI claims have not increased from last Spring, perhaps indicating an issue with the data.
Additionally, the non-seasonally adjusted numbers paint a different picture. For the week ending August 6, there was a modest increase of 7,521 claims to 203,619 claims. The non-seasonally adjusted numbers are diverging from the increasing seasonally-adjusted claims by nearly 60,000. Typical patterns of seasonal adjustment may not be holding up in this complicated pandemic environment.
When considering these non-seasonally adjusted numbers, jobless claims have not meaningfully increased. Supposing the increase is meaningful, the jobs market is able to correct for these layoffs. Amid an incredibly tight and resilient labor market, job turnover is faster than ever. Companies are still looking for workers, shown by elevated job openings rates. The people filing these claims can still find jobs quickly.