[ad_1]
The numbers: The number of Americans who applied for unemployment benefits last week was unchanged at 262,000, leaving it at the highest level since October 2021 and pointing to some emerging softness in a muscular U.S. labor market.
Unemployment claims typically begin to rise when the economy is deteriorating and a recession is approaching. They’ve increased since the beginning of the year but are still extremely low.
Key details: Of the 53 U.S. states and territories that report jobless claims, 39 showed an increase last week. The remaining 15 posted small declines of a few hundred or less.
The most recent reports shows other large states such as Texas and Pennsylvania joining Ohio and California in reporting higher claims in the past few weeks. It doesn’t appear to be a case of fraud like it was in Massachusetts during the spring.
The number of people collecting unemployment benefits in the U.S., meanwhile, rose by 20,000 to 1.78 million.
A gradual increase in these so-called continuing claims over the past year suggests it’s taking longer for people who lose their jobs to find new ones.
Big picture: The elevated levels of jobless claims last week suggests the labor market is losing some of its strength — just as the Federal Reserve had hoped.
The Fed would like to see the labor market soften further to ease the upward pressure on wages as it battles to bring down inflation
The central bank on Wednesday left a key U.S. interest rate unchanged to assess how much its prior increases are slowing the economy. Yet it also opened to door to several more rate hikes this year if inflation doesn’t cool off faster.
Higher borrowing costs typically slow the economy and spur more layoffs.
Looking ahead: “We have noted in recent weeks that the data suggest that the labor market is in the early stages of cooling,” said U.S. economist Thomas Simons of Jefferies. “We will see claims increase further over time, but there will be fits and starts.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades.
[ad_2]
Source link
