US unemployment claims have increased
2022.12.08 08:57
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US unemployment claims have increased
Budrigannews.com – In spite of growing concerns about a recession, the number of Americans filing new claims for unemployment benefits increased moderately last week, indicating that the labor market is still tight and strong.
The Labor Department reported on Thursday that initial claims for state unemployment benefits rose by 4,000 to a seasonally adjusted 230,000 for the week ending December 3. Reuters polled economists and predicted 230,000 claims for the most recent week.
At the beginning of the holiday season, when businesses temporarily stop hiring or close, claims tend to fluctuate. They reached a three-month high a week before Thanksgiving, but the following week almost reversed the rise.
Despite the fact that layoffs have increased in the technology industry, with Twitter and Amazon (NASDAQ:) and Meta, Facebook’s parent company (NASDAQ:), announcing thousands of layoffs in November has not significantly altered the dynamics of the labor market.
Last week, the government released a report stating that nonfarm payrolls rose by 263,000 jobs in November. Technology companies are right-sizing after overhiring during the COVID-19 pandemic, according to economists, noting that small businesses continue to be desperate for workers.
Due to difficulties locating workers following the COVID-19 pandemic, businesses are also hoarding workers. In October, there were 1.7 open jobs for every unemployed person.
In order to reduce inflation, the Federal Reserve wants to slow down the labor market. In the quickest rate-hiking cycle since the 1980s, the U.S. central bank has increased its policy rate by 375 basis points this year, moving it from close to zero to a range of 3.75 percent to 4.0%.
The Federal Reserve is expected to keep tightening monetary policy and raise the policy rate beyond the recently anticipated 4.6 percent, where it may remain for some time.
The claims report also revealed that, as a proxy for hiring, the number of people receiving benefits after an initial week of assistance increased by 62,000 to 1.671 million in the week that ended on November 26.
