Thursday brought more tentative evidence to support the contention that the US labor market’s cooling.

Although far from conclusive, particularly given the proximity of a payrolls print with the potential to tip the scales decisively one way or another, the second-highest initial jobless claims reading since August argued the slowdown case.

At 229,000, claims were only higher once since last summer: Early last month, when a seasonal spike pushed the headline print above 230,000.

The four-week moving average fell as the early-May increase dropped out of the lookback.

The initial claims print meaningfully exceeded consensus. Economists collectively expected 220,000 from the headline. Continuing claims, at 1.792 million, were likewise ahead of estimates and marked a seven-week high.

Again, it’d be a fool’s errand to trade those prints: A warm NFP headline on Friday would negate them, and every other macro release from this week for that matter. However, if the May jobs report comes in soft, the uptick in claims, as well as the mixed ADP release and another decline in job openings, will all be viewed as confirmatory vis-à-vis a slowdown narrative “endorsed” by the BLS’s jobs tally.

Speaking of the BLS, the government this week released the full Quarterly Census of Employment and Wages (QCEW) update for Q4, and as BMO’s Ian Lyngen and Vail Hartman pointed out, it suggested payroll growth was “less robust” last year than previously reported.

“This is the larger quarterly sample set that shows non-seasonally adjusted payrolls growth, not the annual benchmark revisions,” Lyngen and Hartman emphasized. “Attempting to force the NSA into the seasonally adjusted monthly prints is fraught with peril,” they added, as a kind of caveat emptor before noting that the 735,000 gap between the Current Employment Statistics series and the QCEW “implies that on average in 2023, monthly gains were 61,000 lower.”

It’ll be months, BMO’s rates team went on to say, before the market can assess the read-through for the seasonally adjusted data via the BLS’s preliminary benchmark estimates for the April 2023 through March 2024 period. But in the meantime, that -61,000 figure could be considered “a ballpark estimate,” and may constitute yet another piece of tentative evidence that the US labor market “isn’t as robust as previously assumed.”