Weekly Jobless Claims Post Surprise Drop, Continuing Applications Hit Highest Since November 2021

03:12 PM EDT, 07/10/2025 (MT Newswires) -- Weekly applications for unemployment insurance in the US unexpectedly fell, while continuing claims reached the highest since November 2021, government data showed Thursday.

The seasonally adjusted number of initial claims declined by 5,000 to 227,000 for the week ended July 5, according to the Department of Labor. The consensus was for a 235,000 print in a Bloomberg poll. The previous week's reading was revised down by 1,000 to 232,000.

The four-week moving average totaled 235,500, down by 5,750 from the prior week's average that was revised downwardly by 250 to 241,250. Unadjusted claims increased by 10,004 on a weekly basis to 240,802.

Seasonally adjusted continuing claims rose by 10,000 to about 1.97 million for the week ended June 28, in line with analyst projections and the highest since Nov. 13, 2021. The previous week's reading was revised down by 9,000. The four-week moving average grew by 3,500 to 1.96 million, the highest since Nov. 20, 2021, according to the DOL.

"It is concerning that continuing claims remain at the highest level since late 2021, but...this is the result of an extremely gradual increase over the past few years," Jefferies Chief US Economist Thomas Simons said in a note e-mailed to clients. "We see no evidence of significant inflection, and we now expect that continuing claims will likely edge lower in the coming weeks, based on the behavior of initial claims."

On Wednesday, minutes from the Federal Reserve's June meeting showed that most policymakers assessed that "some reduction" in the central bank's benchmark lending rate in 2025 would likely be appropriate amid expectations that price pressures from tariffs may be temporary or modest. This group of policymakers also indicated that economic activity and labor market conditions could weaken, according to the minutes.

At the meeting, the Federal Open Market Committee decided to keep interest rates unchanged for a fourth straight time, while sticking to its federal funds rate outlook for 2025 amid higher inflation expectations.

"Our base case remains that the damage in the labor market will be perceptible, but limited, and that the Fed will cut rates three times starting in September," Simons said Thursday.

Last week, government data showed the US economy added more jobs than projected in June, while the unemployment rate unexpectedly ticked down.

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