This week marks the third release of Unemployment Insurance New Claims since the unemployment rate rang the bells on what looked like a weakening labor market in July, thereby raising expectations for a cut in interest rates. The week ending on 2024-08-24 registered a preliminary number of 231,000 new claims. The US Department of Labor’s reported number is not significantly different than its previous ten weeks running average of 235,545. The most recent monthly estimate of the US Unemployment Rate is 4.39 Percent. New Insurance Claims decreased its levels for the reported week by a difference of -2,000.

The Fed’s staff stated in the FOMC minutes that the intermediate period (July 30th and September 17th) would be crucial to assess the extent to which the economy was facing a concerning weakening labor market, particularly by looking hard at Unemployment Insurance New Claims. None of the latest numbers, even when revisited, have shown any significant uptick in the claims.

The current assessment points to data showing post July’s 2024 Unemployment Rate:

• Non-Increase in Unemployment Insurance
• Half of the states with increases in labor force participation and the other half did not
• Only seven states showed increases in the Unemployment Rate over the month without experiencing labor force participation growth. Those states are Arkansas, Connecticut, Delaware, Florida, Kentucky, North Carolina, and West Virginia
• Aside from those seven states, labor markets in the rest of the country remain strong

These maps show the labor market is not weakening, for the most part. Even if data starts showing some upside changes, all can be assumed to be seasonal, given the end of the summer. Therefore, at this point in time, the balance of risks for the Fed’s dual mandate remains on prices rather than on the unemployment rate side.