Maybe the adage should be, “What goes down must come up,” at least as it pertains to the weekly jobs report.
After five weeks’ worth of modest declines, first-time claims for unemployment assistance went up last week, climbing to 213,000 for the week ending Sept. 17, according to statistics released by the Labor Department Thursday.
That’s 5,000 higher than the adjusted total – 208,000 – reported last week, which was the lowest total since the end of May. The four-week moving average, however, was down by 6,000 to 216,750.
“While overall economic activity is expected to slow, leading to a mild recession in H1 2023, the low level of claims is a reminder that labor market conditions remain extremely tight,” Nancy Vanden Houten, Lead US Economist at Oxford Economics, told Business Insider. “The imbalance between the supply and demand for workers is key factor behind the Fed’s plans to continue aggressively raising interest rates.”
Federal Reserve Chairman Jerome Powell, while calling the job market “out of balance,” on Wednesday announced the Fed was raising interest rates by 75 basis points.
Powell also said to expect more – and possibly larger – increases through the end of the year.
David Bahnsen, chief investment officer for the Bahnsen Group, told U.S. News & World Report he expects the Federal Reserve to “pause its rate hikes in early 2023, as the inflation narrative will eventually calm down.”
“Trucking prices, gasoline, manufacturing, used cars, residential rent, and shipping costs are all going down,” Bahnsen told U.S. News & World Report. “The sticky part of our current inflationary moment is food and when food prices roll over, the entire inflation narrative changes, but not before.”
The Labor Department report showed continuing claims — the number of workers receiving ongoing unemployment assistance — also dropped, falling by 22,000 to 1.379 million in the week ended Sept. 10.