The U.S. Department of Labor announced on Thursday (June 5) that the number of initial jobless claims in the United States rose for the second consecutive week last week (May 25-31).
As of the week ending on May 31, the seasonally adjusted number of initial claims for unemployment benefits increased by 8,000 to 247,000. Economists surveyed by Reuters had previously expected the number of initial claims for that week to be 235,000.
The data included the Memorial Day holiday, and economists noted that this might have posed challenges for seasonal adjustments, potentially leading to the consecutive second-week increase in unemployment benefit claims. Nevertheless, they believed that this report still provided evidence of weakening in the labor market.
The Federal Reserve’s Beige Book released on Wednesday stated, “Uncertainty led to postponement of hiring… All regions mentioned declining labor demand, reduced working hours, decreased overtime, paused hiring, and planned layoffs.”
A survey report by the Institute for Supply Management indicated that employment in the service sector remained steady in May, but all positions that needed to be filled faced “more stringent” evaluations.
According to the report, for the week ending on May 24, the number of people continuing to receive unemployment benefits after the initial claims decreased by 3,000, seasonally adjusted to 1.904 million. The rise in ongoing claims for unemployment benefits was consistent with consumers’ weakened confidence in the labor market.
Another report from Challenger, Gray, and Christmas, a global outplacement firm, showed that U.S. employers announced 93,816 job cuts in May, a 12% drop from April. Compared to a year ago, the number of job cuts increased by 47%.
This data will not impact the employment report for May, which the Labor Department is set to release on Friday, as it falls outside the survey period.
A survey by Reuters among economists suggested that nonfarm payrolls in May might increase by 130,000, following an increase of 177,000 in April, with the unemployment rate expected to remain at 4.2%.
Encouraging economic news came from another report by the U.S. Commerce Department’s Bureau of Economic Analysis, showing a significant narrowing of the trade deficit in April, which could potentially boost economic growth for the quarter.
(Based on reports from Reuters)