Initial unemployment claims climbed to 229,000 last week, though economists said seasonal factors and a still-low four-week average suggest the labor market remains steady.
By yourNEWS Media Newsroom
New applications for unemployment benefits rose more than expected last week, reaching their highest level since February as seasonal factors and a mixed labor market outlook drew renewed attention from economists.
Initial jobless claims increased by 4,000 to 229,000 for the week ending June 6, according to Department of Labor data released June 11.
Economists had expected 219,000 new claims.
The increase came during a time of year when claims often rise because some states allow non-teaching school employees to apply for unemployment benefits during summer breaks.
The four-week moving average, which smooths out weekly volatility, edged up to 219,000. That level remains low by historical standards and is consistent with what economists have described as a “low-hire, low-fire” labor market.
Continuing claims, which measure the number of people already receiving unemployment benefits, rose to 1.795 million from 1.771 million the previous week. That marked the highest level since early April.
Economists watch weekly claims data closely because it provides one of the most current measures of labor market conditions.
Recent employment indicators have offered a mixed picture. The U.S. economy has added 565,000 nonfarm payroll jobs over the past three months, while the unemployment rate remains low at 4.3%.
Job openings have also increased, rising above 7.6 million, the highest level since November 2024, according to the Bureau of Labor Statistics.
While job growth had been concentrated in a narrow set of industries over the past year, hiring has broadened recently, ADP Chief Economist Nela Richardson said.
“The labor market continues to show sustained momentum going into the summer hiring season,” Richardson said in a statement.
ADP reported that private employers added an average of 29,000 jobs per week during the four weeks ending May 23.
Small businesses, however, are showing more caution. The National Federation of Independent Business reported that hiring plans and job openings have eased to their lowest levels in six years. Small business owners cited labor quality, payroll costs and inflation as their top concerns.
“More small business owners are struggling with significant and unpredictable hikes in fuel prices, which are more challenging for small businesses to pass on to their customers compared to their larger corporate competitors,” Bill Dunkelberg, the group’s chief economist, said in the June 9 report.
The Federal Reserve’s latest Beige Book, a periodic summary of economic conditions across the central bank’s 12 districts, also described a “low-hire, low-fire environment.” The report said workers are “increasingly reluctant to change jobs because of economic uncertainty.”
“Hiring remained selective and primarily focused on critical roles or attrition replacement,” the report said.
“Professional services occupations had mixed demand conditions, partly reflecting shifts in technological and operational changes.”
Despite geopolitical tensions and renewed inflation pressure, broader labor market indicators remain relatively stable.
The St. Louis Federal Reserve’s analysis of unemployment flows, which examines workers finding jobs, people entering the labor force and discouraged workers leaving the job market, showed little recent change. In May, the regional Fed said those measures remained “close to their recent averages” and offered “further evidence of a steady labor market.”
The latest employment data may reassure Federal Reserve officials who entered 2026 concerned about downside risks to the labor side of the central bank’s dual mandate.
The economy lost 116,000 jobs in the final three months of 2025 and posted almost no job growth in January and February. Since then, hiring has improved.
“Job growth has averaged 114,000 per month so far this year, which almost certainly exceeds the pace needed to keep up with entrants to the workforce,” Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said in an emailed note to The Epoch Times.
Chair Kevin Warsh told lawmakers during his April Senate confirmation hearing that labor market metrics suggest the economy is at full employment.
That strength, combined with renewed inflation concerns, could increase expectations that the Federal Reserve’s next policy move may be an interest rate hike rather than a cut.
Annual consumer inflation has climbed above 4% for the first time in three years. The Fed will hold its next two-day policy meeting beginning June 16, when officials will release updated economic projections and a new dot plot showing policymakers’ expectations for future interest rates.
“The June Dot Plot will likely signal more FOMC members think the central bank’s next move should be a hike, rather than a cut (Just one member thought this back in March),” Adams said.
“Even so, the Fed is unlikely to signal a hike is imminent, and the many crosswinds buffeting the economy could change the Fed’s thinking by the time they are ready to act,” he added.
The jobless claims report shows some softening at the margins, but economists said the broader labor market remains resilient as the Fed weighs inflation, employment and economic uncertainty ahead of its June meeting.
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