Americans had good reason to celebrate as the unofficial start of summer kicked off last week: very few workers are losing their jobs to layoffs.
The seasonally adjusted number of initial claims for unemployment benefits climbed last week to 225,000, the highest figure in four months, according to data from the Labor Department released Thursday. The four-week moving average of initial claims rose by 6,500 to 214,750.
The previous week’s level was revised down by 3,000 from 215,000 to 212,000. The four-week average was revised down by 750 to 208,250.
Economists had forecast around 215,000 initial claims.
But the rise in weekly claims was driven entirely by seasonal adjustments, which expected claims to fall by 10,803 or 5.7 percent. As a result, the seasonal adjustment lifted claims by nearly 20 percent. Without the adjustment, claims were nearly flat, declining by just 0.1 percent or 121 to 187,978.
The timing of this year’s Memorial Day likely impacted the claims data. Claims are often volatile around holidays and shortened workweeks, particularly when government offices are closed. Since 1971, Memorial Day always falls on the last Monday of May, which on average is May 28. This year’s May 25 date was the earliest possible date for the holiday.
Despite the increase in the seasonally adjusted figure, claims remain very low by historical standards and indicate few Americans are losing their jobs to layoffs. Adjusted claims have only been this low or lower in 12.6 percent of the weeks going back to 1967. The median weekly claims number is 338,000, including weeks that occurred during recessions and the pandemic lockdown era. If we compare the most recent data to historical data going back to 1967 on claims in the same week of the year, there have only been 5 other weeks in which claims have been this low or lower, in 1968, 1969, 2018, 2019, and 2022.
Looked at another way, in weeks that included Memorial Day going back to 1971, when the date was fixed as the last Monday in May, seasonally adjusted claims have only been this low or lower in three other years: 2018, 2019, and 2022.
Without the seasonal adjustment, the latest claims data looks even better by historical standards. Claims have only been this low or lower in 4.3 percent of the weeks going back to 1967. For the same week of the year, claims were this low or lower just five other times: 1967, 1968, 1969, 1973, and 2022. For Memorial Day inclusive weeks, unadjusted claims have only been lower two other times, in 1973 and 2022.
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