Employers are retaining current workers, but cautious consumers and slower hiring are making it difficult to find new work.
New unemployment claims declined to 206,000 last week, down from a revised 212,000. This indicates that employers are not conducting large-scale layoffs—good news for people who already have jobs.
Continuing claims, however, rose by 18,000 to nearly 1.8 million. One weekly increase does not make a trend, but it suggests that some people receiving benefits are taking longer to find another job.
Claims also provide only a partial picture. Strict eligibility rules exclude many people who need work, including new job seekers, people returning to the workforce, workers who exhausted their benefits and discouraged applicants who stopped looking.
Consumer Cutbacks Reach the Job Market
Walmart reported slower-than-expected sales growth as customers reduced discretionary spending. This reflects choices many households are making: buying one shirt instead of three, postponing a nonessential purchase or using the treats already in the cupboard rather than buying another package.
Read the gifted New York Times article about Walmart, Target and the American consumer
These are sensible household decisions. When millions of consumers make them together, they affect employment.
| What happens | How it affects jobs |
|---|---|
| Customers buy fewer nonessential items | Retailers leave vacancies unfilled |
| Retailers order less inventory | Warehouses and delivery companies handle fewer products |
| Suppliers receive smaller orders | Manufacturers reconsider production and hiring |
| Businesses become cautious | Part-time hours and seasonal hiring may be reduced |
None of this necessarily creates an unemployment claim. A worker whose hours are reduced has not been laid off. A vacant position that is never posted creates no claim. Yet both developments weaken the job market.
One Encouraging Regional Report
The Philadelphia Federal Reserve’s manufacturing index rose from 41.4 in July to 47.4 in August, well above expectations. Its employment index also reached its highest level since April 2022, while price pressure eased somewhat.
That is encouraging, particularly for job seekers in eastern Pennsylvania, southern New Jersey and Delaware. But this is a relatively small regional survey. Its employment index measures the share of manufacturers reporting increases versus decreases—it does not count the number of jobs created.
What Comes Next
Today’s reports describe a low-hiring, low-layoff economy. Job security remains fairly good for many current workers, but people trying to find work face fewer genuine openings and longer searches.
The next national employment report will tell us more about actual job creation, hours worked and labor-force participation. For our readers, the important question is not simply whether layoffs remain low. It is whether enough employers are ready to hire.
Weekly unemployment claims — U.S. Department of Labor
Philadelphia Fed regional economic surveys
Willie and I appreciate every reader.