U.S. initial jobless claims edged down last week, but continuing claims hit a three-month high.

The U.S. labor market shows a pattern of resilience mixed with concerns: initial jobless claims have slightly declined, but continuing jobless claims have risen to a three-month peak.

Data released by the U.S. Department of Labor on Thursday showed that for the week ending June 13, initial jobless claims decreased by 4,000 from the previous week to 226,000, slightly higher than economists' expectations of 225,000 according to Bloomberg. Meanwhile, continuing jobless claims rose to 1.81 million in the previous week, marking the highest level in nearly three months.

After the release of the data, market expectations for the Federal Reserve's monetary policy direction tilted further toward a hawkish stance. Although the rise in continuing claims suggests that the job market's absorption capacity may be slowing at the margins, the strong performance of the May nonfarm payroll report (with 172,000 new jobs added), combined with the slight decline in initial jobless claims this time, has reinforced the prevailing view that "the labor market remains resilient," thereby increasing investor bets on the likelihood of interest rate hikes.

Initial jobless claims decline, four-week average hits new interim high

This week, initial jobless claims fell from 230,000 (a four-month high) to 226,000, still within the normal fluctuation range of the past four years. By region, Pennsylvania and Oregon saw the most significant increases, while Ohio and Illinois experienced the largest declines.

It is worth noting that the four-week moving average used to smooth weekly fluctuations has risen to 223,250, reaching a new high since December last year. This indicates that despite improvements in single-week data, the overall trend of initial claims remains on a mild upward path.

Continuing claims rise to three-month high, reemployment pressures increase

Continuing jobless claims have once again surpassed 1.8 million, rising to a new three-month high, reflecting growing difficulties for some unemployed workers in returning to work. However, this indicator remains significantly below the cyclical peak of nearly 2 million seen in the fourth quarter of 2025, and overall pressure remains within manageable limits.

Bloomberg analysis points out that although the energy price shocks driven by the Iran war exert some pressure on the economy, the overall labor market remains resilient. Initial jobless claims have risen year-on-year, but are still low by historical standards and remain below levels seen last year during the same period.

Labor market resilience supports hawkish Fed stance

Taking the recent employment data together, the sustained resilience of the labor market provides support for the Federal Reserve's continued tight monetary policy stance. After the May nonfarm employment report outperformed expectations, the market began to reprice the path of interest rate hikes, and the slight decline in initial jobless claims this time further reinforced this policy framework.

Analysts note that the current job market is in a "low layoff" mode, with limited overall willingness of companies to make cuts; however, the continued rise of continuing jobless claims also suggests that the ability to absorb new jobs may be slowing at the margin. The future trend of the data, especially whether continuing claims will continue to rise, will be an important observation window for the market to assess the scope for Federal Reserve policy action.

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