Jobless Claims in U.S. reaches record high

The largest increase in applications in nearly two years reported by the Labor Department on Thursday was driven by rises in Ohio, Minnesota and California. After rampant fraud in Massachusetts briefly boosted claims to a 1-1/2-year high in May before being revised away, economists cautioned against reading too much into the latest rise.

“The jump in claims could be a sign of a pickup in layoffs, but given the volatility of claims from week-to-week, it is too soon to reach that conclusion,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

“The narrowness of the increase in claims by state is a further factor suggesting we should wait for additional confirmation before concluding layoffs have picked up, especially given the fraud in Massachusetts recently.”

Initial claims for state unemployment benefits jumped 28,000 to a seasonally adjusted 261,000 for the week ended June 3, the highest level since October 2021. Economists had forecast 235,000 claims for the latest week.

Unadjusted claims increased only 10,535 to 219,391 last week, with applications in Ohio surging 6,345 and filings in California shooting up 5,173.

Claims increased 2,746 in Minnesota. Applications in Ohio have risen in recent weeks, attributed by the state to layoffs in the manufacturing, automobile, and transportation and warehousing industries. Auto manufacturers usually close plants in summer for retooling.

“Some auto plants take temporary breaks during the summer although the dates change slightly every year which makes it hard for seasonal factors to capture correctly,” said Gisela Hoxha, an economist at Citigroup in New York.

Reuters/Hauwa Abu