The number of Americans filing for unemployment benefits remained relatively high last week, potentially another signal that the Federal Reserve’s rate hikes are beginning to cool a potentially labor market. amazing resilience.
The Labor Department reported Thursday that US jobless claims were 264,000 for the week ending June 17, the same as the previous week’s revised number. That was a bit more than analysts had expected. The number of requests over the past two weeks is the highest since October 2021.
The four-week moving average of claims, which eliminates some of the weekly volatility, rose 8,500 to 255,750. That is the highest level since November 2021.
The number of jobless claims over the past three weeks has risen to nearly 300,000 after most have been at a high of 100,000 to a low of 200,000 since the fall of 2021. But that may not be enough for Fed officials. who have previously said that the unemployment rate needs to rise beyond 4% to bring down inflation.
Overall, the labor market remains healthy, with the U.S. economy adding jobs at a breakneck pace since more than 20 million jobs disappeared when the pandemic hit in the spring of 2020. Americans are enjoying themselves. unusual job security, despite the Federal Reserve’s aggressive campaign to cool the economy and the labor market in an attempt to quell persistent inflation not seen since the early 1980s.
Last week, Fed officials decided not to raise the central bank’s benchmark lending rate for the first time in 15 months, although some said they expected a half-point hike by the end of the week. this year. Fed Chairman Jerome Powell reiterated that possibility in testimony to Congress on Wednesday.
The rate hike has gradually helped curb inflation, though perhaps not as quickly as expected. The labor market remained unusually strong throughout the more than year-long rate hike campaign designed to cool it.
US employers added a surprising 339,000 jobs last month, well above expectations, painting an encouraging picture of the job market, even as the unemployment rate rose to 3 .7%. In April, employers posted 10.1 million job openings, up from 9.7 million in March and the most since January. Economists had expected the positions recruitment will decrease.
There are other signs that Fed policies are being applied. The U.S. economy grew at a faint 1.3% annualized rate from January to March as businesses wary of a recession slashed their inventories. That’s a slight upgrade from the original growth estimate of 1.1%.
The manufacturing sector has shrunk and three bank failures are attributed in part to higher interest rates.
While the labor market remains strong, there have been some major layoffs recently, mostly in the tech sector, where many companies say they’ve been hiring too much during the pandemic. . IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn, Spotify and DoorDash have all announced layoffs in recent months. Amazon and Facebook, Meta’s parent company, have each announced two rounds of job cuts since November.
Outside of the tech sector, McDonald’s, Morgan Stanley and 3M have also recently announced layoffs.
Overall, 1.76 million people were receiving unemployment benefits in the week ending June 10, about 13,000 lower than the previous week.