Evelyn Reynolds

Jobless claims totaled a seasonally adjusted 231,000 for the week ended May 4, up 22,000 from the week before the highest since late August 2023.
Continuing claims, which run a week behind, increased to 1.78 million, up 17,000 from the previous week.

Jobseekers during a Construction Career Fair at Cape Fear Community College in Wilmington, North Carolina, US, Wednesday, March 15, 2023. 
Allison Joyce | Bloomberg | Getty Images

Initial filings for unemployment benefits hit their highest level since late August 2023 in a potential sign that an otherwise robust labor market is changing.
Jobless claims totaled a seasonally adjusted 231,000 for the week ended May 4, up 22,000 from the previous period and higher than the Dow Jones estimate for 214,000, the Labor Department reported Thursday. It was the highest claims number since Aug. 26, 2023.

The increase in claims follows a string of mostly strong hiring reports, though hiring in April was light compared to expectations. Also, job openings have been declining amid expectations that the labor market is likely to slow through the year.
Along with the move higher in layoffs, the report showed that continuing claims, which run a week behind, increased to 1.78 million, up 17,000 from the previous week. The four-week moving average of claims, which helps smooth out weekly volatility in numbers, increased to 215,000, up 4,750 from the previous week.
“Weekly jobless claims are one of the timeliest indicators of when the economy is starting to undergo serious deterioration, and the magnitude of new layoffs this week looks worrisome,” wrote Christopher Rupkey, chief economist at FWDBONDS. “One week does not a trend make, but we can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
Nonfarm payrolls increased by 175,000 in April, below the Wall Street estimate of 240,000 and the smallest gain since October 2023. However, the unemployment rate was at 3.9%, continuing a string since February 2022 of holding below 4%.
Markets reacted little to the jobless claims release, with stock market futures slightly negative and Treasury yields mixed.

Excluding seasonal adjustments, claims totaled 209,324, up 10.4% from the previous week. New York alone saw an increase of more than 10,000, accounting for more than half the total rise.
“A low number of claims had become almost monotonous, and while this surprising spike could well be a blip, we should expect more volatility and a trend toward higher claims as the labor market normalizes,” said Robert Frick, corporate economist at Navy Federal Credit Union.
Federal Reserve officials are watching the jobs numbers closely as they continue in efforts to bring inflation back to 2%. Following their meeting last week, policymakers noted that “job gains have remained strong,” though that came before the April employment report release.
Markets are expecting the central bank to begin lowering interest rates in September. More

Billionaire investor Stanley Druckenmiller on Tuesday blasted fiscal and monetary authorities, including Treasury Secretary Janet Yellen and Fed Chair Jerome Powell, for causing high inflation.
“Bidenomics, If I was a professor, I’d give him an ‘F,'” Druckenmiller said.
Druckenmiller also called himself a “man without a candidate” as he feels a Donald Trump presidency would fuel inflation.
“To some extent, I feel like they fumbled on the five yard line,” he said of the Fed.

Reckless government spending enabled by the Federal Reserve is hurting average Americans and endangering President Joe Biden’s chances at getting reelected, billionaire investor Stanley Druckenmiller said Tuesday.
During an appearance on CNBC’s “Squawk Box,” the head of Duquesne Family Office who made his name betting against the British pound in the early 1990s blasted fiscal and monetary authorities, including Treasury Secretary Janet Yellen and Fed Chair Jerome Powell.

In addition, he called “Bidenomics” a failure and said consumers are paying the price in terms of higher inflation.
“There does seem to be a lot more recognition … of the fiscal situation facing us. Everybody seems to get it but Yellen, who just keeps spending and spending,” Druckenmiller said. “I think it’s dumb politically because it’s causing inflation and it doesn’t take a genius to figure out that the average American is getting hurt by the inflation.”
Druckenmiller’s comments come with the Fed still trying to bring inflation down, as policymakers have dashed investors’ hopes for aggressive interest rate cuts this year.
Getting markets enthused about rate reductions was a mistake because it set financial conditions “on fire,” he said.
“It seemed to me the Fed was in a perfect position. Inflation was coming down, financial conditions were tightening,” he said. “To some extent, I feel like they fumbled on the five-yard line.”

The Fed’s mistake

Though Druckenmiller said his firm was “a major beneficiary” of the jump in asset prices and easing conditions, he still thinks the Fed’s pivot in late 2023 to push harder on the idea that rate cuts were coming was a mistake. The Fed at that point only upped its unofficial forecast from two to three cuts. However, investors interpreted comments from Powell in December to mean that a substantial policy easing was ahead.
Elected officials generally welcome low interest rates. Druckenmiller said Powell didn’t do Biden any favors.
Biden is in a tight battle with former President Donald Trump heading into the November election.
“Bidenomics, If I was a professor, I’d give him an ‘F,'” Druckenmiller said. “Basically, they misdiagnosed Covid and thought [the economy] was going into a depression. The Fed did, too.”
“Treasury is still acting like we’re in a depression,” he added. “They’ve spent and spent and spent, and my new fear now is that spending and the resulting interest rates on the debt that’s been created are going to crowd out some of the innovation that otherwise would have taken place.”
The pandemic onset occurred under the Trump administration, which signed into law a $2.3 trillion coronavirus relief package in 2020. Biden then signed another nearly $2 trillion relief package in 2021.
Druckenmiller also didn’t have many good things to say about Trump, who he said was likely to see inflation under his presidency as well.
During his time in office, Trump was a fierce Fed critic and repeatedly hectored Powell and his colleagues to lower interest rates. In addition, Trump advocated heavy tariffs and has indicated he would do so again if he wins in November.
“With Biden, I’m more worried about stagflation, with all the government spending, with all the tricks that Yellen has been using to manipulate yield curve, with the way the Fed seems to have reignited financial conditions. I think the inflationary outcome could be there,” Druckenmiller said. “But I also fear regulation and everything else preventing productivity.”
“So, I’m basically a guy without a candidate,” he added. “I’m an old-style Reagan, free markets, pro-immigration and anti-tariff Republican.”

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The share of renters who believe that they one day will be able to afford a home, fell to a record low 13.4%, according to a New York Federal Reserve survey released Monday.
There’s not a lot of good news on the renting front, either. Respondents expect rental costs to increase by 9.7% over the next year.

A sign advertising a home for sale is displayed outside of a Manhattan building on April 11, 2024 in New York City. 
Spencer Platt | Getty Images

The dream of home ownership has gotten even further away for renters, with higher housing costs and elevated interest rates standing in the way of the American housing dream, according to a New York Federal Reserve survey released Monday.
The share of renters as of February who possess hopes of “residential mobility,” or the belief from renters that they one day will be able to afford a home, fell to a record low 13.4% in the central bank’s annual housing survey for 2024.

That’s down from 15% in 2023 and well off the 20.8% series high back in 2014.
Pessimism about future prospects comes amid a confluence of factors conspiring against the likelihood of renters being able to transition to home ownership.
For one, some 74.2% of renters viewed obtaining a mortgage as somewhat or very difficult, which the New York Fed said has “deteriorated substantially” from the 66.5% level in 2023 and 63.1% in 2022.
Moreover, mortgage rates have remained high by historical standards. A 30-year fixed-rate mortgage now carries an average 7.22% borrowing rate, the highest since late November 2023, according to Freddie Mac.
Housing affordability has improved little, with the median price in February at $388,700, the highest since November, according to the National Association of Realtors. The NAR’s housing affordability index was at 103 in February, down slightly from January but still at elevated levels with average monthly housing payments at $2,040.

Survey respondents expect housing prices to increase 5.1% over the next year, nearly double the 2.6% expected rate in February 2023 and above the pre-pandemic mean of 4.2%.
Despite prospects for the Fed to cut interest rates before the end of 2024, respondents think mortgage rates are only going to go higher. The outlook for a year from now is that borrowing costs will be 8.7%, and 9.7% in three years, both survey records.
There’s not a lot of good news on the renting front, either. Respondents expect rental costs to increase by 9.7% over the next year, up 1.5 percentage points from last year’s survey and the second highest in series history.
The results come a week after the Federal Open Market Committee voted to hold benchmark interest rates steady while indicating that there has been “a lack of further progress” in its efforts to bring the annual inflation rate back down to 2%.
Futures market pricing is indicating that the Fed will begin lowering rates in September, with a another cut likely to come in December.

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Immigrant workers made up 18.6% of the workforce last year, a new record, according to Bureau of Labor Statistics data.
Many of those workers are taking open positions in agriculture, technology and health care, fields where labor supply has been a challenge.
The government predicts that the influx of immigrant workers will grow gross domestic product over the next decade by $7 trillion.

The strong jobs market has been bolstered post-pandemic by strength in the immigrant workforce in America. And as Americans age out of the labor force and birth rates remain low, economists and the Federal Reserve are touting the importance of immigrant workers for overall future economic growth.
Immigrant workers made up 18.6% of the workforce last year, a new record, according to Bureau of Labor Statistics data. Workers are taking open positions in agriculture, technology and health care, fields where labor supply has been a challenge for those looking to hire.

Despite the U.S. adding fewer-than-expected jobs in April, the labor force participation rate for foreign-born workers ticked up slightly, to 66%.
“We don’t have enough workers participating in the labor force and our birth rate has dropped down 2% last year from 2022 to 2023. … These folks are not taking jobs. They are helping to bolster and helping us build back — they’re adding needed workers to the labor force,” said Jennie Murray, CEO of the National Immigration Forum, a nonpartisan nonprofit advocacy organization. 
The influx of immigrant workers is also a projected boost to U.S. output, and is expected to grow gross domestic product over the next decade by $7 trillion, Congressional Budget Office Director Phillip Swagel noted in a February statement accompanying the 2024-2034 CBO outlook.
“The labor force in 2033 is larger by 5.2 million people, mostly because of higher net immigration. As a result of those changes in the labor force, we estimate that, from 2023 to 2034, GDP will be greater by about $7 trillion and revenues will be greater by about $1 trillion than they would have been otherwise. We are continuing to assess the implications of immigration for revenues and spending,” Swagel wrote.

‘Huge competition’

Goodwin Living, a nonprofit faith-based elder-care facility in Northern Virginia that cares for 2,500 adults day to day, is heavily reliant on immigrant workers. Some 40% of its 1,200 workers are foreign-born, representing 65 countries, according to CEO Rob Liebreich, and more workers will be needed to fill increasing gaps as Americans age and need assistance. 

“About 70% of 65-year-olds are expected to need long-term care in the future. We need a lot of hands to support those needs,” Liebreich told CNBC. “Right now, one of the best ways that we see to find that is through people coming from other countries, our global talent, and there’s a huge competition for them.”
In 2018, Goodwin launched a citizenship program, which provides financial resources, mentorship and tutoring for workers looking to obtain U.S. citizenship. So far, 160 workers and 25 of their family members have either obtained citizenship or are in the process of doing so through Goodwin. 
Wilner Vialer, 35, began working at Goodwin four years ago and serves as an environmental services team lead, setting up and cleaning rooms. Vialer, who came to the U.S. 13 years ago from Haiti, lost his job during the pandemic and was given an opportunity at Goodwin because his mother had been employed at the facility.
He applied for U.S. citizenship before getting his current job, but after he worked there for six months, the Goodwin Living Foundation covered his application fee of $725, the nonprofit said. Vialer became a U.S. citizen in 2021, and his 15-year-old daughter received a citizenship grant and became a U.S. citizen in 2023.
Vialer’s hope is to have his wife join the family from Haiti, as they have been separated for six years.  
“This program is a good opportunity,” Vialer said. “They help me, I have a family back home. … This job really [does] support me when I get my paycheck to help them back home.”
Workers are not required to stay with Goodwin after becoming U.S. citizens, but those who do stay are there 20% longer than those who do not participate in the program, Liebreich said. Speeding up the path to citizenship is key to remaining competitive in a global economy, he added.
“If we want to attract and retain this global workforce, which we desperately need, we need to make the process a lot easier,” Liebreich said.
Looking ahead to November, immigration will be a hot topic on the presidential campaign trail and for voters. Both President Joe Biden and former President Donald Trump have made trips to the southern border in recent months to address the large number of migrants entering the country. More

The unemployment rate fell for both male and female Black Americans in April, going against the broader trend.
The overall unemployment rate rose to 3.9% in April from 3.8%, and the other racial demographics all saw their unemployment rates increase.
The labor force participation rate among Black Americans also slipped.

A networking and hiring event for professionals of color in Minneapolis.
Michael Siluk | Getty Images

The unemployment rate for Black Americans fell in April, bucking the overall trend, according to data released Friday by the Department of Labor.
Black Americans remain the racial group with the highest jobless percentage in the U.S., even after the group’s unemployment rate dipped to 5.6% last month from 6.4% in March. Still, that’s notable compared with the overall unemployment rate — which rose to 3.9% in April from 3.8% — and to the other racial demographics, which all saw their unemployment rates increase last month.

White Americans saw their unemployment rate edge fractionally higher to 3.5% from 3.4%. The jobless rate for Asian and Hispanic workers, respectively, rose to 2.8% from 2.5%, and to 4.8% from 4.5%.

But the unemployment rate for Black Americans has been noticeably volatile, rising to 6.4% in March from 5.6% in February.
“Luckily, for many reasons, that came down. I think that speaks to last month really just being a statistical blip that happens because of small sample sizes, and having that come down now for April is very promising,” said Elise Gould, senior economist at the Economic Policy Institute. “And you’re seeing that happen for Black men and Black women alike.”
Gould added that she’s still keeping a close eye on the unemployment rate for Black Americans, which rose four months in a row prior to April. It’s a key indicator — or the canary in the coal mine — to watch, since historically marginalized groups often feel the effects of a soft labor market first, she said.

Among Black workers, the labor force participation rate crept lower, to 63.2% from 63.6%.

Meanwhile, the overall labor force participation rate held steady at 62.7%. The metric rose to 64.7% from 64.1% for Asian Americans, and climbed to 67.3% from 66.8% for Hispanic workers.
Gould pointed out another positive trend: that the employment rate ticked higher in April for “prime age workers,” or those from ages 25 to 54.
— CNBC’s Gabriel Cortes contributed to this report.

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