The Labor Department reported Thursday that the number of people filing jobless claims rose higher than expected, increasing by 3,000 to a seasonally adjusted 231,000 for the week ending June 30.
However, the markets largely shrugged off the news with all major indices opening in the green. As of 11:00am Eastern Time, the Dow Jones Industrial Average was up 82 points, the NASDAQ was up about 30 points and the S&P 500 gained 10 points.
Tightening Labor Market Conditions
In addition to the unemployment filings, U.S. private payrolls rose less than expected in June–signs that point to a tightening labor market. With the jobless rate at 3.8 percent, which is an 18-year low, the labor market represents near or full employment. Furthermore, the Federal Reserve is forecasting an unemployment rate of 3.6 percent by the end of 2018.
Additionally, the ADP National Employment Report on Thursday showed private employers hired 177,000 workers in June–13,000 less than what the markets expected. However, private payrolls did increase in May by 189,000.
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“Business’ number one problem is finding qualified workers,” said Mark Zandi, chief economist at Moody’s Analytics Inc. “At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes.”
Friday will reveal more employment data, such as nonfarm payrolls, the unemployment rate and average hourly earnings. The comprehensive employment report will likely show that employers added 195,000 jobs in June in addition to the 223,000 jobs created in May based on a Reuters survey of economists.
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