New U.S. Unemployment Numbers Higher Than Expected

U.S. unemployment claims for last week came in hotter than expected, with continuing claims rising to 1.867M, the highest level since COVID vaccinations were rolled out en masse in November 2021.

What’s the scoop?

• Above Expectations: Unemployment claims for the second week of July were 243k, up 20k from the week prior and 8% above analyst expectations for a 225k increase. On a non-seasonally adjusted basis, claims soared to 279k, with major upticks noted in Texas (attributed to hurricane impacts), Michigan, Minnesota, and California.

Bankless take:

Although this morning’s release of unemployment data did not directly correspond to the market slide, the risks of a deteriorating global economy are likely top of mind for many investors.

While continuing claims have not yet reached disaster level, U.S. unemployment has risen sharply in recent months to trigger the “Sahm Rule,” a lagging indicator that has accurately predicted every recession since 1950 with only one false positive, indicating that investors should pay careful attention to emerging employment risks.