WASHINGTON: The number of Americans filing new claims for jobless benefits increased moderately last week, pointing to a still-tight and strong labour market despite growing fears of a recession as the Federal Reserve (Fed) fights to dampen demand.
Though the weekly jobless claims report from the Labor Department on Thursday (Dec 8) showed unemployment rolls, or the so-called continuing claims, rising to a 10-month high in late November, economists cautioned against reading too much into the move as the data are volatile around this time of the year.
Labour market tightness and resilience keeps the US central bank on course to continue hiking interest rates for a while.
“It is too early to interpret higher continuing claims as a signal of a loosening labour market,“ said Isfar Munir, an economist at Citigroup in New York. “The holiday time is generally not attractive to workers to start a new job, compounded by many firms temporarily closing during the holiday period.”
Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 230,000 for the week ended Dec 3. Last week’s increase was in line with economists’ expectations. Claims are well below the 270,000 threshold, which economists said would raise a red flag for the labour market.
Claims tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring, which can make it hard to get a clear read of the labour market.
Nevertheless, there has been a rise in layoffs in the technology sector, with Twitter, Amazon and Meta, the parent of Facebook, announcing thousands of job cuts in November.
Unadjusted claims jumped 87,113 to 286,436 last week, driven by large increases in California, New York, Georgia and Texas. There were also notable rises in Illinois, Pennsylvania, Indiana, Ohio, New Jersey and Washington state.
The unemployment rate for people on jobless benefits increased to 1.2%, the highest since March, from 1.1% in the prior week. That suggests it is taking a bit longer for the unemployed to find work.
“This might be a sign of a modest easing in the tightness of the labour market and, if it continues, it would sound a cautionary note on the outlook,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
But DeQuadros also warned that the data was difficult to seasonally adjust around Thanksgiving.
“We should wait to see if continuing claims continue to rise or whether the insured rate falls back modestly in the first week of December as it did in 2020 and 2021,“ he said. – Reuters
