It was a mixed morning for labor market data. What could be a bad omen for tomorrow’s Nonfarm Payrolls number, ADP’s monthly payroll report showed the weakest month of job creation since the start of the pandemic. On the bright side, this week’s initial jobless claims number continued to reverse off of recent highs dropping back down to 200K.  While the levels from February through April were even stronger, this week’s reading remains impressive nonetheless with the only comparable levels being during the two years leading up to the pandemic as well as all the way back in the late 1960s.

From a seasonal perspective, tailwinds are likely to become headwinds over the next couple of months.  As shown in the second chart below, the current week of the year has historically been when unadjusted jobless claims have put in a seasonal low. That is typically followed by several weeks of consistent weekly increases that lead to a short-term peak usually in mid-July. In other words, it should not be surprising to see claims move higher in the weeks ahead, but regardless of any seasonal moves, this week did mark the lowest reading for the comparable week of the year since 1973. That reaffirms the seasonally adjusted reading in that claims are at impressively low levels.

Although initial claims have come off the lows and are likely to keep doing so as seasonal trends shift, continuing claims keep hitting new lows.  This week’s reading fell all the way down to 1.309 million from 1.343 million last week.  That is now the lowest level since the last week of 1969.    Click here to learn more about Bespoke’s premium stock market research service.