Signs of a weakening labor market? The number of continuing jobless claims in the United States rose to a new high since the end of 2021
The US labor market is showing signs of weakness, with the number of continued jobless claims rising to a new high since the end of 2021. It is taking longer for the unemployed to find work, and US companies are significantly slowing down their hiring, leading to an increase in the unemployment rate. Economists and Federal Reserve policymakers are closely monitoring signs of a continued softening in the labor market. Goldman Sachs' chief economist predicts that the labor market may be approaching a potential "turning point," with the unemployment rate likely to rise. Morgan Stanley's chief investment officer warns that how the US labor market evolves will determine the "success or failure" of the US stock market, which could decline by 10%
According to the latest information from Zhitong Finance and Economics APP, data released by the US Department of Labor on Thursday showed that the initial jobless claims in the US for the week ending June 22 were 233,000, lower than the market expectation of 236,000 and the previous value of 238,000. Meanwhile, the continued jobless claims for the week ending June 15 in the US rose to 1.839 million, higher than the market expectation of 1.824 million and the previous value of 1.828 million, reaching the highest level since the end of 2021. This seems to be a warning signal, indicating that it is taking longer for the unemployed to find work.
Compared to the widespread labor shortages in the later stages of the pandemic, recruitment by US companies has significantly slowed down, with the US unemployment rate rising to 4% in May for the first time in two years. Economists and Federal Reserve policymakers are closely monitoring the initial jobless claims data to look for signs of a continued softening in the labor market. So far, the labor market has shown remarkable resilience.
Jan Hatzius, Chief Economist at Goldman Sachs, recently stated that the labor market is approaching a potential "turning point," where further softening in labor demand could lead to an increase in the unemployment rate. Mike Wilson, Chief Investment Officer at Morgan Stanley, stated that how the US labor market evolves will determine the "success or failure" of the US stock market, as any sudden weakness could trigger a meaningful adjustment in the stock market. Wilson pointed out that the current stock market rally is being driven by hopes for the "golden-haired girl," and if this prospect is shattered, it could lead to a 10% decline in the stock market. He added that if non-farm payrolls fall below 100,000 or the unemployment rate rises above 4.3%, an economic slowdown will be evident