Chart of the day: Initial jobless claims ease amid tight labor market
REAL ECONOMY BLOG | April 28, 2022
Authored by RSM US LLP
New claims for jobless benefits fell by 5,000 last week to 180,000 as labor demand continued to be robust and layoffs remained historically low.
This marked the 13th week in a row that new jobless claims stayed below the pre-pandemic level in 2019 at 214,000. Our long-term measure that strips out weekly volatility—the 13-week moving average—continued to trend downward.
Still, we expect the trend to level off in the next couple of months as the economy slows because of fading fiscal support and tightened monetary policy.
Demand for labor will most likely moderate, but the pace of moderation will depend heavily on how fast the Federal Reserve raises interest rates.
While a labor market with plentiful jobs is a strong foundation for economic growth, it can be a double-edged sword if the market remains too tight for too long, which, in the words of Federal Reserve Chairman Jerome Powell, is unhealthy.
But it is unlikely that a sharp turn in labor demand and an increase in layoffs will take place soon as the Fed has been trying to prioritize a soft landing.
If the Fed succeeds in crafting a soft landing, which seems to be a tall order, we should expect new jobless claims to stay below the pre-pandemic level before moving back up as the economy heads toward its long-term growth rate.
Call us at +1 213.873.1700, email us at email@example.com or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Tuan Nguyen and originally appeared on 2022-04-28.
2022 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.