New Labor Department data showed initial unemployment claims declined slightly from the prior week’s four-month high, but continuing claims rose as economists warned the labor market remains marked by limited hiring and limited layoffs.
By yourNEWS Media Staff
New applications for unemployment benefits declined slightly last week, offering another sign that layoffs remain contained even as broader hiring momentum appears to be slowing.
Initial jobless claims fell by 4,000 to 226,000 for the week ending June 13, according to Department of Labor data released June 18. The prior week’s figure was revised upward to 230,000, which marked a four-month high.
The latest total was just above market expectations of 225,000.
The four-week moving average, which smooths out weekly volatility, rose by 4,000 to 223,250.
The data suggest the labor market remains steady but subdued, with employers continuing to avoid large-scale layoffs while also showing limited appetite for new hiring.
“Despite a strong payroll report in May, this is still a low-hire, low-fire market, and the labor data have yet to point to gathering momentum,” Indeed Hiring Lab economists said in a June 18 research note.
The U.S. economy added 172,000 jobs in May. Over the past three months, payrolls have grown by 565,000, following a weak start to the year.
However, separate private-sector data indicate that hiring may be slowing. Payroll processor ADP reported that private employers added an average of 25,500 jobs per week during the four weeks ending May 30, marking the fourth straight week of slower job growth.
Continuing unemployment claims also moved higher, suggesting some job seekers may be taking longer to find work.
Recurring claims, which measure the number of people already receiving unemployment benefits, climbed to 1.81 million from 1.79 million, the Labor Department reported. Economists watch continuing claims as an indicator of how difficult it is for unemployed workers to find new jobs.
Online job postings have also softened.
Indeed said job postings fell 2.2% in May after a strong start to 2026 and are nearing levels seen before the COVID-19 pandemic.
“Indeed’s Job Posting Index has been hovering around 100 for the past few weeks, and if recent trends continue, it is likely to drop below 100 soon,” Indeed said. “Returning to pre-COVID levels of job postings is not inherently concerning, given the strength of the labor market in early 2020, but it is certainly worth watching.”
The latest unemployment claims report comes as the Federal Reserve weighs labor conditions against persistent inflation pressure.
At the conclusion of its June Federal Open Market Committee meeting, the Fed left its benchmark interest rate unchanged in a target range of 3.5% to 3.75%. It was the fourth straight meeting with no rate change.
Fed Chairman Kevin Warsh used his first meeting as central bank chief to emphasize the inflation side of the Fed’s dual mandate.
“Inflation has been running well ahead of the Fed’s long-stated inflation goal of 2 percent,” Warsh said in his June 17 opening statement. “That’s been going on for more than five years.”
Warsh said labor market data have been moving in a favorable direction, and the Fed’s latest Summary of Economic Projections showed policymakers slightly lowering their unemployment forecast for this year.
The median unemployment rate projection for 2026 is now 4.3%, down from the March estimate of 4.4%. Policymakers also expect unemployment to be 4.3% in 2027 and 4.2% in 2028.
Inflation projections, however, moved higher.
Fed officials now expect annual Personal Consumption Expenditure inflation to reach 3.6% this year, up from the previous projection of 2.7%. Inflation is projected to slow to 2.3% next year and return to 2% in 2028.
Economists at RBC Economics said Warsh’s comments made clear that inflation remains the central focus for the new Fed chairman.
“By our count, inflation was mentioned by Warsh himself 19 times compared to only 4 mentions of labor during the press conference,” RBC economists wrote in a June 18 note. “After Warsh’s opening remarks, the state of the US labor market was not mentioned until over halfway through the question period.”
RBC expects the Fed to leave interest rates unchanged for the rest of the year. Investors, however, have priced in the possibility of a rate hike as early as October.
The latest claims data show layoffs remain limited, but rising continuing claims, slower private hiring and weaker job postings point to a labor market that may be losing momentum even as it avoids a sharp downturn.
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