Global Courant 2023-04-13 18:17:11
US claims for unemployment benefits rose to their highest level in more than a year, but remain relatively low despite efforts by the Federal Reserve to cool the economy and labor market in its fight against inflation.
U.S. jobless claims for the week ending April 8 rose 11,000 to 239,000 from the previous week, the Department of Labor said Thursday. That is the highest number since January 2022, when 251,000 people applied for unemployment benefits.
The four-week moving average of claims, which offsets some of the week-to-week swings, rose 2,250 to 240,000. That is the highest number since November 2021.
Last week, the Labor Department unveiled revised estimates of the number of weekly claims for unemployment benefits according to a new formula it uses to reflect seasonal adjustments. The new formula, which led to an increase in the weekly count, aims to more accurately capture seasonal patterns in job losses.
Claims for unemployment benefits are generally considered to reflect the number of layoffs in the US
The labor market finally appears to be showing some signs of weakening, more than a year after the Federal Reserve launched an aggressive campaign to cool inflation by raising its benchmark interest rate nine times in about a year.
U.S. employers provided a solid 236,000 jobs in March, suggesting the economy remains solid despite the nine rate hikes the Federal Reserve has imposed over the past year to curb inflation. The unemployment rate fell to 3.5%, just above the 53-year low of 3.4% recorded in January.
In its latest quarterly forecast, the Fed predicts the unemployment rate will rise to 4.5% by the end of the year, a steep rise historically associated with recessions.
Also last week, the Labor Department reported that the number of job openings in the US fell to 9.9 million in February, the lowest number since May 2021.
Some details from Friday’s Labor Department report pointed to the possibility that inflationary pressures could ease and that the Fed could soon decide to pause its rate hikes. Average hourly wages rose 4.2% from 12 months earlier, well below a year-on-year increase of 4.6% in February.
The government also reported on Thursday that wholesale prices fell sharply in March. A day earlier, the government said consumer prices rose just 0.1% between February and March, up from 0.4% between January and February and the smallest increase since December. However, prices are still rising fast enough to keep the Federal Reserve on track to raise rates at least one more time from May.
Layoffs are on the rise in the technology sector, where many companies were aggressively hiring during the pandemic. IBM, Microsoft, Salesforce, Twitter and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each cut two jobs since November.
About 1.81 million people received unemployment assistance in the week ending April 1, a decrease of 13,000 from the previous week. That number is close to pre-pandemic levels.
