Death by a thousand second-tier macro reports.
On the heels of a very poor ISM services release and a sharp deceleration in private-sector hiring, initial US jobless claims overshot estimates in Thursday’s update, fanning concerns about the health of the labor market ahead of Friday’s NFP headline.
The initial filers print was 247,000 for the week to May 31, up 8,000 from the prior week and the highest since the hurricane spike in early October.
The four-week moving average is now 235,000, the highest since October 26.
Obviously, this data isn’t relevant for the May jobs report. For both the household and establishment surveys the BLS reference period is the calendar week which contains the 12th day of the month.
Still, Thursday’s claims headline will garner attention for being the second ~240k or higher print in a row (the prior week was revised lower to 239,000, but you get the point). As the chart shows, that’s a rarity these days. Consensus was looking for a decline to 235,000.
Continuing claims, by contrast, undershot consensus at 1.904 million for the week to May 24.
Meanwhile, Thursday’s Challenger, Gray & Christmas update counted 93,816 job cut announcements for May, up 47% YoY, but down from April and well off the DOGE spike highs.
Services businesses, including temp firms, led cut announcements in May with 22,492, the most for that sector since May of 2020, at the onset of the pandemic.
Layoffs “are spreading,” the release noted, but “‘DOGE impact’ remains the leading reason for job cut announcements in 2025.”
Commenting further, Andrew Challenger wrote that “tariffs, funding cuts, consumer spending and overall economic pessimism are putting intense pressure on companies’ workforces.” American businesses, he went on, “are spending less, slowing hiring and sending layoff notices.”
So far in 2025, employers have announced more than 696,000 job cuts. That, Thursday’s Challenger report pointed out, means we’re just 65,000 cuts away “from matching the entire year’s total for 2024.”
Insert your favorite “golden age” joke.
The trend is pretty clear. How fast? How far? Layoffs do tend to snowball though. Without clear policies out of Washington, things won’t improve. The BBB looks like it is trouble. Monetary policy on hold. Tariffs depend on the whim of a toddler.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually, then suddenly.”
That is the setup for the US economy under Trump.
BLS jobs data reported each month effectively reports jobs extant at the start of the previous month, for businesses on a biweekly payroll. In times of inflection, that data lag is significant. Not for nuthin’ is employment a lagging indicator.
The temp workers category in the monthly NFP data is something I long focused on as a leading indicator within the dataset.
Also RHI etc.
Yeah, but the racism factory is hiring like gangbusters.