June 12, 2023 — Jobless Claims Highest Since October 2021

JUNE 12, 2023 – JOBLESS CLAIMS HIGHEST SINCE OCTOBER 2021

First time US jobless claims totaled 261,000 last week, up 28,000 from the week before and well above expectations for 235,000 claims.  This was the highest weekly rate since October 2021, signaling a possible softening of the labor market in the run up to the Fed’s two-day meeting tomorrow, where the policymakers could announce movement in interest rates.

The market is anticipating the Fed will hold rates steady at the regularly scheduled meeting. The chances of no-increase rose to 73.6 percent after the claims data release, it was 65 percent last week. Weakness in the labor market will reduce pressure on the Fed to lift rates in order to tame inflation.  Inflation has slowed but remains well ahead of the targeted 2 percent.

On Tuesday, the Bureau of Labor Statistics will release May’s consumer price index report, with expectations for a 0.1 percent monthly increase.  This data will also factor into any Fed decision.