Unemployment Holds Steady Despite Available Jobs

Thought of the Week / June 25, 2021

Unemployment Holds Steady Despite Available Jobs

The Department of Labor released its weekly report on new jobless claims yesterday, June 24^th. Last week’s jobless claims totaled 411,000, which is a slight decline from the previous week, but worse than the expected estimate of 380,000.
 
This unexpected unemployment number is especially surprising when compared to the record number of job openings. As of last week, there were 9.3 million job openings and 9.6 million people filed jobless claims.
 
The good news is although this unemployment number is higher than the Dow Jones estimate, it is still a decline from the previous week. With the amount of job openings, hopefully this decrease continues and surpasses the pandemic-era low of 375,000 jobless claims.
 
The Fed
In other news, Fed Chair Jerome Powell held a press conference on Tuesday, June 22^nd.  He stated that while inflation has surged higher than the original forecast, he believes this is due to the economic reopening, and that data is supportive that inflation will subside over time. He also stated that 1970’s and 80’s level inflation (which reached nearly 20%) is “very, very unlikely.”
 
The Market
The markets moved higher again on Friday, adding to an already strong week. The Dow Jones has led the way (up 0.65% as of 12:38pm) on Friday. These gains were helped by Nike’s strong quarterly earnings report, and the announcement by President Joe Biden that he has reached an infrastructure agreement. This agreement will include an additional $600B for new roads and clean energy. The total plan will cost approximately $1T over the next 5 years.