Dept. of Labor Adjusts Unemployment Calculations for a Cooling Labor Market

Beginning with the April 7 release, the Department of Labor’s (DOL) calculation for initial jobless claims, which is used as a proxy for layoffs, reverts to multiplicative seasonal adjustment models. This pre-Covid methodology resulted in a revision of March’s weekly average of claims up from the 198,250 claims previously reported to 237,750 which is close to the 2019 pre-pandemic average of 220,000. Continuing claims of jobseekers increased to 1.8 million, the highest level since December 2021. An increase in initial claims could indicate an easing of the demand for workers and signal the cooling of the hot labor market, which the Federal Reserve has said would impact further rate hike decisions.

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