From a five-month low, jobless claims increased.
Initial and recurring claims are still at historically low levels.
Applications for US unemployment insurance rose by more than forecast last week, though they remained historically low.
According to Labor Department figures released on Thursday, initial jobless claims jumped by 29,000 to 219,000 in the week ending October 1. The previous week was downgraded to its worst point since April.
The median estimate in a Bloomberg survey of economists called for 204,000 new applications. It was only the third increase in claims since the end of July.
The unpredictable week-to-week movements are smoothed out by the four-week moving average, which remained stable at 206,500.
The September 24, continuing claims for state assistance increased a little to 1.36 million.
The pickup in claims — if sustained — would suggest lackluster spending in various sectors and uncertainty about the economy’s prospects are prompting some businesses to lay off workers. That said, the level of applications remains low and continues to signal a robust labor market.
Data released earlier this week revealed that job vacancies fell by the highest in August since the beginning of the epidemic, suggesting that the labor market may be deteriorating. However, there have recently been more companies making job cuts or layoff announcements than usual, including Robinhood Markets Inc., Microsoft Corp., Tesla Inc., Netflix Inc., and Ford Motor Co.
According to Bloomberg Economics, layoffs will increase as the year ends, the Fed raises interest rates, and the job market continues to cool. Nevertheless, by historical standards, the level is still modest. Initial claims increased to an average of 388k during the start of the previous five recessions, except for the recession in Covid-19.
— Economist Liza Winger
The claims numbers come before the monthly employment report on Friday, which is anticipated that companies increased payrolls by 260,000 in September. Although fewer jobs would have been added in a month than there had been since a fall in late 2020, it is still a significant increase and a sign of a healthy labor market. The unemployment rate is anticipated to remain close to a five-decade low, and average hourly wages will continue their steady rise.
Initial claims climbed to 167,083 last week on an unadjusted basis. After Hurricane Fiona battered the island nation in mid-September, Puerto Rico saw a significant increase that propelled the progress.
The effects of Hurricane Ian, which impacted South Carolina and Florida last week, might be shown in the statistics in the upcoming weeks.
The number of claims increased in Massachusetts and Missouri as well.
According to career services company Challenger, Gray & Christmas’ report released on Thursday morning, U.S.-based employers made nearly 30,000 layoffs in September, up nearly 68% from the same month last year and up 46% from August. This is the fifth consecutive month that the number of layoffs exceeded 2021.
The firm’s Andrew Challenger said in a statement that “some cracks are beginning to develop in the labor market,” adding that the slowing housing market and the Fed’s rate rises are forcing banks and lenders to lay off mortgage staffers. At the same time, recession fears have created more uncertainty.
According to Challenger, hiring intentions, a measure of how many new jobs employers plan to add, declined to their lowest level since 2011. This suggests that rather than hiring more staff in anticipation of the holiday season, retail and warehousing companies may wait to see whether customers show up.
The Labor Department reported on Thursday that new jobless claims increased 15% to 219,000 last week, coming in more than expected and breaking a ten-week string of better-than-expected statistics, which is another indication that the labor market is finally beginning to cool.
The chief economist of Pantheon Macro stated in comments sent via email that although rising claims aren’t yet a sign of a trend changing—especially given how many businesses are still having trouble hiring and retaining staff—claims could rise to 230,000 next week, the highest level since late August.
Jobless Claims Fall Less Than Expected – The New York Times. https://www.nytimes.com/2011/06/03/business/economy/03econ.html
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