Unemployment Claims Rise, Highest Since October 2021: Signs Of Cracks In The Job Market

The number of Americans registering for unemployment benefits in the week ending May 6 rose by 22,000 to 264,000, above the expected 242,000, the U.S. Labor Department reported Thursday.

Initial jobless claims came in at 264,000. That's up from 242,000 the prior week, and well above expectations of 242,000. 

• This was the highest level in weekly unemployment claims since October 2021. 
• The four-week moving average for jobless claims, which eliminates week-to-week variability, rose to 245,250, up from 239,250 previously.
• Continuing jobless claims for the week ended April 29 rose from a revised 1,801,000 to 1,813,000, slightly below the expected 1,820,000.

• Noteworthy increases in jobless claims were reported in Massachusetts, up by 6,375, California, up by 2,924, and Missouri, up by 2,446.

Chart: US Weekly Jobless Claims Hits October 2021 Levels

Market Reactions: The U.S. stock market is expected to open lower on Thursday, as indicated by futures on the S&P 500 which are down 0.3% just ahead of the opening bell on Wall Street. The S&P 500 index is tracked by the SPDR S&P 500 ETF Trust SPY. 

Yields on U.S. Treasuries fell across the board as markets saw the unexpectedly large number of new applications for unemployment insurance as an early warning sign of weakness in the labor market.

Thursday also saw the producer price index (PPI) rising less than expected last month. Traders are currently fully pricing in a Fed rate pause in June, and are increasing their bets on a rate cut as early as July. 

Next: US Producer Prices Rise Less Than Expected In April, Cementing Hopes Of Fed Hold In June