Economists Predict Decline in Weekly Jobless Claims

Economists surveyed by FactSet are forecasting that 235,500 initial unemployment applications were submitted for the week ending June 15. This marks a decline from the previous week’s 242,000, which had reached the highest level in a decade.

Four-Week Moving Average Trends Upwards

Jobless claims for the week ended June 8 increased, pushing the four-week moving average to 227,000 from 213,000 in February. Higher sustained levels may indicate prolonged labor market weakness, possibly prompting the Federal Reserve to speed up interest rate cuts.

Higher jobless claims suggest weakening labor market, potentially accelerating Fed interest rate cuts for stabilization, WSJ Print Subscription said.

Department of Labor Report Due June 20

The Department of Labor will release its eagerly awaited weekly unemployment insurance claims report at 8:30 a.m. Eastern time on June 20th. Analysts closely monitor this report as it indicates economic health and labor market trends, offering insights into initial unemployment benefit claims.

Analysts Weigh In on Recent Increase

Economists expressed surprise at last week’s 13,000 rise in initial jobless claims, linking it to seasonal fluctuations related to the end of the school year and California’s minimum wage increase. However, despite this increase, last week’s figure was lower than the 260,000 claims filed during the same period in 2023.

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Santander Economist Predicts Temporary Increase

Stephen Stanley, chief economist at Santander, expects several weeks of high new claims initially. Thursday’s figure might rise slightly before potentially declining to 230,000 to 240,000 initially. By fall, it could drop further to around 210,000, according to Stanley’s projections.

Morgan Stanley Cautions on Employment Risks

Ellen Zentner, chief U.S. economist at Morgan Stanley, highlighted concerns over businesses aiming to cut labor expenses, potentially signaling sustained softening in the workforce despite strong payroll growth in May.

Federal Reserve Monitoring Labor Market

Jan Hatzius, chief economist at Goldman Sachs, emphasized the Federal Reserve’s sensitivity to unemployment rate and jobless claims data, suggesting that further softening in the labor market could impact future rate cut decisions.

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