Weekly Claims For Unemployment Rise From 22,000 to 231,000
 |
| US Weekly jobless claims |
A further indication that the labor market was slowly cooling was provided last week when the number of Americans filing new applications for unemployment benefits reached its highest point in over eight months.
The Labor Department's weekly report on unemployment claims, which provides the most up-to-date information on the state of the economy, was released on Thursday. It came amid news last week that April saw the fewest job additions in six months as job opportunities fell to a three-year low.The Federal Reserve has reconsidered two interest rate decreases this year due to the labor market's diminishing momentum.
"The labor market shows some signs of rebalancing with fewer job openings posted around the country, and now company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year," said Christopher Rupkey, chief economist for FWDBONDS.
For the week ending May 4, the number of first claims for state unemployment benefits rose by 22,000 to a seasonally adjusted 231,000, the highest since the end of August of last year. It was the biggest rise in almost four months.
For the week ending May 4, the number of first claims for state unemployment benefits rose by 22,000 to a seasonally adjusted 231,000, the highest since the end of August of last year. It was the biggest rise in almost four months.
Reuters polled economists, who predicted 215,000 claims in the most recent week. Claims exceeded the 194,000–225,000 range that had been the norm since the year's beginning."
"Given that the varied timing of school spring breaks, and holidays like Easter and Passover, makes the seasonal adjustment process very complicated, we often see volatile readings in the seasonally adjusted data around this time of year," said Daniel Silver, a JPMorgan economist.
Unadjusted claims increased sharply last week, from 19,690 to 209,324; filings in New York increased by 10,248. Chief Economist Ian Shepherdson of Pantheon Macroeconomics surmised that the increase might be the result of "Citigroup employees laid off in January but paid through April making their first claims."
Significant increases in applications were also observed in Texas, California, Illinois, Indiana, and Illinois. The only state where claims decreased by more than 1,000 was Iowa.
The Institute for Supply Management and the NFIB, among other sentiment surveys, have been pointing to a significant downturn in the labor market. However, after finding it difficult to find workers during and after the COVID-19 pandemic, companies seem to be reducing hiring while retaining most of their current workforce.
Wall Street stocks were rising in value. In relation to a currency basket, the dollar declined. The price of US Treasury notes varied.
Rebalancing The Labor Market
After the US Federal Reserve raised interest rates by 525 basis points since March 2022 in an effort to reduce demand across the board, the labor market has been gradually returning to equilibrium.
September is when the financial markets anticipate the Fed to begin its easing cycle. A few analysts predict that July will see the first rate reduction. Next week's inflation statistics may provide new insights into when the much anticipated rate decrease will occur. It is anticipated that the data will demonstrate a moderating of monthly increases in consumer prices following three months of robust readings.
The benchmark overnight interest rate, which has been in the 5.25%–5.50% band since July, was not adjusted by the central bank last week. Although analysts anticipate a softening of the job market this year, they did not think that the spike in claims last week marked the start of that trend.
According to the claims report, during the week ending April 27, the number of people getting benefits after an initial week of aid—a proxy for hiring—increased by 17,000 to a seasonally adjusted 1.785 million.September is when the financial markets anticipate the Fed to begin its easing cycle. A few analysts predict that July will see the first rate reduction. Next week's inflation statistics may provide new insights into when the much anticipated rate decrease will occur. It is anticipated that the data will demonstrate a moderating of monthly increases in consumer prices following three months of robust readings.
The benchmark overnight interest rate, which has been in the 5.25%–5.50% band since July, was not adjusted by the central bank last week. Although analysts anticipate a softening of the job market this year, they did not think that the spike in claims last week marked the start of that trend.
Stuart Hoffman, senior economic advisor at PNC Financial, stated, "This still very low level of continuing claims is further evidence that the big jump in initial claims in early May is not the start of a persistent rise in laid-off workers but bears close watching."
"The labor market is improving in terms of balancing the supply and demand for workers, which will assist to curb wage increases."
0 Comments