In June 2023, the Department of Labor released data showing that there were approximately 48,786 job cuts announced by US-based employers. This was a decrease from May’s numbers but still higher than the previous year. Despite this, economists like Luke Tilley from Wilmington Trust are closely monitoring specific data points within the monthly jobs report to gain insight into the current state of the labor market.
Tilley highlighted the increase in unemployed persons by reason for unemployment, which has risen by about 200,000 people on a three-month average basis compared to the previous year. While raw job growth numbers may appear strong, a closer look at the data suggests a labor market that is at risk of declining back to a more normalized state. This is indicated by the fact that continuing claims, filed by individuals who have been receiving benefits for at least a week or more, also increased to their highest level since November 2021.
Layoff activity in the US has not shown a significant spike, with fewer job cuts announced in June compared to May. However, the number of layoffs is still higher than last year’s figures, indicating ongoing challenges in the job market. In addition, initial claims for unemployment benefits also increased by 4,000 from the previous week and brought the four-week average of initial claims to its highest level since August 2023. These developments suggest that Americans are remaining unemployed for longer periods of time and facing uncertainties and challenges in finding new employment opportunities.
