New jobless claims spiked to levels not seen since January, according to a Thursday report from the U.S. Department of Labor’s Employment and Training Administration.
The United States saw 229,000 seasonally adjusted initial unemployment claims — which are filed by a jobless individual after a separation from an employer — for the week ending on June 4. The claims exceed the Dow Jones estimate of 210,000, according to CNBC.
David Bahnsen, the founder of Manhattan-based wealth management firm The Bahnsen Group, told The Daily Wire that 229,000 new weekly claims are “still a very low number.” He remarked that although he believes there will be a shift into employer pessimism, “this isn’t it yet.”
Weekly claims surpassed 6 million in April 2020 amid COVID-19 and the lockdown-induced recession, more Department of Labor data indicate. The labor market has since seen continuous recovery — reaching a post-recession low of 166,000 weekly claims in March 2022 before the current moderate spike. The results for the first week of June are similar to levels from January of this year.
Other recent reports indicate a mild slowdown in employment gains. Payroll processing company ADP announced last week that the private sector created 128,000 new jobs in the month of May — missing the Dow Jones estimate of 299,000 and falling from 202,000 new jobs created in April. The results represented the worst job growth figures since mass layoffs sent 19 million workers home in April 2020.
Companies with fewer than 50 workers saw payrolls fall by 91,000. The majority of the aforementioned layoffs — 78,000 — were experienced by companies with fewer than 20 workers.
“Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,” ADP chief economist Nela Richardson said, per CNBC. “The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.”
Many economists consider the labor market to be a bright spot amid multiple economic headwinds — including rising price levels, supply chain woes, and the Russian invasion of Ukraine. After nearing 15% following government lockdown orders in the spring of 2020, unemployment rates gradually fell to their current levels of 3.6%, according to data from the U.S. Bureau of Labor Statistics.
Accordingly, messaging from the Biden administration has focused on high employment — without recognizing that much of the job growth occurred as the United States regained lost positions rather than creating new ones from scratch.
“President Biden is building a better America,” a post from the White House claimed in May. “The U.S. economy has added nearly 8 million jobs since President Biden took office and experienced the greatest year of job growth under any President in history last year.”
Likewise, a January tweet from the White House highlighted job gains under Biden as several times higher than his predecessors. The message, however, failed to recognize that the White House was comparing gains over the course of one year to predecessors’ four-year and eight-year terms. “Don’t count your chickens before they hatch,” Washington Post fact-checker Glenn Kessler remarked.
Though unemployment remains low, inflation has led to a decrease in real average hourly earnings — meaning that Americans must work more to enjoy the same standard of living witnessed before the post-recession inflation hikes.