July 10, 2025

Initial unemployment claims fell 5 thousand in the week ending July 5 to 227 thousand after having declined 5 thousand in the previous week.    The labor market has hardly been affected by layoffs thus far.  However, we know that some government workers are being fired.  Keep in mind that federal government employment is only 2.0% of total employment so the impact for the economy as a whole should be fairly small. However, this series has risen slightly in recent weeks.  The 4-week average of claims was 239 thousand at the end of June 2024  versus 227 thousand today.

The number of people receiving unemployment benefits rose 10 thousand in the week ending June 28 to 1,965 thousand after having declined 9 thousand in the previous week. This series has been edging upwards in recent weeks

Given little change in the number of people receiving unemployment benefits, the insured unemployment rate was unchanged in the most recent week at 1.3% after being unchanged in the previous week.  Before the shutdown started in 2020 it was at 1.2% so it is still essentially at its pre-recession level.

The insured unemployment rate tracks closely the unemployment rate.   Given the level of the insured unemployment rate, we expect the unemployment rate to rise 0.1% in July to 4.2%.  We also expect payroll employment to increase 135 thousand.  These numbers will be released on Friday, August 1..

Following a 0.5% decline in the first quarter, we expect GDP growth of 3.5% in the second quarter and 1.9% in 2025.

Stephen Slifer

NumberNomics

Charleston, SC