By
Derek Hamilton
July 23, 2025
Employment growth has held up reasonably well this year, especially for private-sector, non-government workers. Private employment has grown at an average pace of roughly 115,000 a month through June, which is just below the average of the past two years; however, other data suggest the labor market is not as healthy as it was the last few years.
Each week, the US Department of Labor aggregates states’ unemployment insurance claims, which are among our favorite economic indicators because the data is timely and typically sees very little revision. Unemployment claims are measured in two ways: initial claims, representing people filing for unemployment insurance for the first time, and continuing claims, representing people continuing to file every week.
The chart below shows that while initial claims have generally moved sideways over the past few years (dark green line), continuing claims have trended higher (light green). This pattern is highly unusual and could be a byproduct of the pandemic-era challenge of finding workers, with companies hesitant to lay off workers they struggled to initially hire. This dynamic is echoed in the data showing low hiring and firing rates.
Given the unusual economic environment of the past few years, rising continuing claims may be signaling a more cautious approach to hiring.
US unemployment claims
Sources: Macquarie, Macrobond, US Department of Labor.
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