The number of Americans filing new claims for jobless benefits increased moderately last week, while continuing claims hit a 10-month high towards the end of November, suggesting the labor market was gradually slowing down.
Still, labor market conditions remain tight, keeping the Federal Reserve on course to continue increasing interest rates as it fights inflation. The labor market has remained resilient in the face of growing recession risks, caused by the Fed’s aggressive monetary policy campaign.
“Overall, the labor market remains tight and demand for workers is strong,” said Rubeela Farooqi, chief US economistat High Frequency Economics in White Plains, NY. “But the claims data are suggesting a very gradual shift up in layoffs. “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 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 labor market. They shot up to a three-month high a week before the Thanksgiving holiday, only to almost unwind the surge in the following week.
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 and Washington state.
Though there has been an increase in layoffs in the technology sector, with Twitter, Amazon and Meta, the parent of Facebook, announcing thousands of job cuts in November, that has not significantly shifted labor market dynamics.
The claims report also showed the number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 62,000 to 1.671 million in the week ending Nov. 26, the highest since February.
[Written in collaboration with other media outlets with information from the following sources]
