Job seekers attend a construction job fair at Cape Fear Community College on Wednesday, March 15, 2023, in Wilmington, North Carolina, United States.
Alison Joyce | Bloomberg | Getty Images
Initial jobless claims reached their highest level since late August 2023, which may indicate changes in the otherwise strong labor market.
Number of people applying for unemployment benefits The U.S. Labor Department reported Thursday that seasonally adjusted total employment was 231,000 for the week ended May 4, an increase of 22,000 from the previous period and above the Dow Jones’ forecast of 214,000. This is the highest number of claims since August 26, 2023.
Jobless claims rose after a series of mostly strong hiring reports, although April hiring was smaller than expected. Additionally, job openings have been falling amid expectations that the labor market may slow this year.
The report showed that as the number of layoffs increased, the number of people continuing to claim unemployment benefits also increased to 1.78 million, an increase of 17,000 from the previous week. The four-week moving average of jobless claims increased to 215,000, an increase of 4,750 from the previous week, which helps smooth out fluctuations in the weekly numbers.
“Weekly jobless claims are one of the most timely indicators of when the economy is beginning to deteriorate significantly, and the scale of this week’s new layoffs looks daunting,” FWDBONDS chief economist Christopher Rupkey wrote. People are worried. ” “One week doesn’t determine the trend, but if today’s weekly jobless claims are any indication, we can no longer be sure that the future of the U.S. economy will be smooth.”
Nonfarm payrolls increased by 175,000 in April, below Wall Street expectations of 240,000 and the smallest increase since October 2023. .
The market reaction to the jobless claims was muted, with stock futures down slightly and Treasury yields mixed.
After excluding seasonal adjustments, the total number of claims was 209,324, an increase of 10.4% from the previous week. The increase in New York alone exceeded 10,000, accounting for more than half of the total increase.
“Low jobless claims have become almost monotonous,” said Robert Frick, corporate economist at Navy Federal Credit Corp. “While this surprising spike is likely to be a temporary blip, as the labor force As markets normalize, we should expect greater volatility and higher jobless claims trends.
Fed officials are closely watching the employment data and continuing their efforts to bring inflation back to 2%. After last week’s meeting, policymakers noted that “job growth remains strong,” although this was before the April jobs report was released.
The market expects the central bank to start cutting interest rates in September.
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