US Economics Weekly: Shifting balance of risks

Research evidence excerpt

US Economics Weekly: Shifting balance of risks

US Economics Weekly

10 July 2026 Citi Research

Continuing jobless claims have been rising from low levels, suggesting that the

familiar seasonal pattern, where labor market data softens over the summer

months, may be repeating. Data for initial jobless claims out this week covered July

4th and may be distorted by the holiday, meaning the next couple weeks will help to

better establish the trend.

Figure 5. Continuing claims have been rising Figure 6. Initial claims generally following the same pattern

as recent years

Continuing Claims (SA, Thous) Initial claims 2023 Initial claims 2024

2000 Initial claims 2025 Initial claims 2026

1950 260

1900 250

1800 Thous. 240230

Thous 1750 avg 220

1700 4-week 210

Dec-22 Feb-23 Apr-23 Jun-23 Aug-23 Oct-23 Dec-23 Feb-24 Apr-24 Jun-24 Aug-24 Oct-24 Dec-24 Feb-25 Apr-25 Jun-25 Aug-25 Oct-25 Dec-25 Feb-26 Apr-26

© 2026 Citigroup Inc. No redistribution without Citigroup’s written permission. © 2026 Citigroup Inc. No redistribution without Citigroup’s written permission.

Source: Citi Research Source: Citi Research

That the labor force is not a source of inflationary pressure is affirmed by wage

data. Monthly average hourly earnings picked up in June, but to a rate consistent

with inflation running around target. The Atlanta Fed Wage Tracker was also

stronger on the month, but the three-month smoothed measure remains at rates

that prevailed pre-pandemic.

Figure 7. Atlanta Wage tracker has slowed to pre-pandemic Figure 8. AHE for different sectors are close to their pre-

range pandemic rates

Atlanta Fed Wage Growth Tracker: Non-Smoothed (NSA, Y/Y %Chg) AHE relative to 2019 average YoY growth

Atlanta Fed Wage Growth Tracker (3M smoothed) Goods-producing Industries Information Services