U.S. labor market still tight despite continuing claims hitting 10-month high

  • Weekly unemployment claims increase 4,000 to 230,000
  • The following increases by 62,000 to 1.671 million

WASHINGTON, Dec 8 (Reuters) – The number of Americans filing new claims for unemployment benefits rose slightly last week, pointing to a steady and strong labor market despite fears of a recession as the Federal Reserve struggles to ease demand.

Although the weekly jobless report from the Labor Department on Thursday showed the unemployment rate, or what it said was still at a 10-month high at the end of November, economists cautioned against reading too much into the numbers. time of year.

The stability of the labor market and confidence will allow the US central bank to continue to raise interest rates for a while.

“It’s too early to interpret the ongoing trend as a labor market indicator,” said Isfar Munir, chief economist at Citigroup in New York. “The holiday season is often an inauspicious time for employees to start a new job, which is compounded by many companies closing down temporarily during the holiday season.”

Initial jobless claims from the government rose 4,000 to a seasonally adjusted 230,000 for the week ending Dec. 3. Last week’s increase was in line with economists’ expectations. Claims are below 270,000, which economists said raises a red flag for the labor market.

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Claims tend to be volatile at the start of the holiday season when companies are temporarily closed or hiring is slow, which can make it difficult to accurately read the labor market. They shot up to three months a week before the Thanksgiving holiday, but were just about to finish the extension the following week.

However, there has been an uptick in layoffs in the tech sector, with Twitter, Amazon ( AMZN.O ) and Meta ( META.O ), the parent of Facebook, announcing thousands of job cuts in November.

Default claims jumped 87,113 to 286,436 last week, led by big increases in California, New York, Georgia and Texas. There were also impressive increases in Illinois, Pennsylvania, Indiana, Ohio, New Jersey and Washington.

The number of people who receive benefits after the first week of assistance, assistance in hiring, increased by 62,000 to 1.671 million in the last week of Nov. 26, what he said showed. That was the highest level in the continuation of claims since February.

The unemployment rate for people with jobless benefits rose to 1.2%, the highest since March, from 1.1% last week. This means that it takes longer for unemployed people to find work.

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Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. US Treasury yields rose.

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“This could be a sign of a slowdown in the labor market and, if it continues, could be a warning for sentiment,” said Conrad DeQuadros, chief financial adviser at Brean Capital in New York.

But DeQuadros also cautioned that what was available was difficult to change the weather around Thanksgiving.

“We have to wait to see if the claims continue to rise or if the insurance price will return slowly in the first week of December as it was in 2020 and 2021,” he said.

Some economists also warned, saying that adjusting for climate change and other measures would show a smaller increase than the government had predicted.

“This could be very important in the ongoing situation that shows the increase in the data recorded in recent months in the states but does not show the movement using other changes in the climate,” said Daniel Silver, an economist at JPMorgan in New. York.

Despite the recent steady rise in claims, there has been no significant change in labor market trends.

The government reported last week that nonfarm payrolls rose by 263,000 jobs in November. Economists say tech companies are booming after over-hiring during the COVID-19 pandemic, and that smaller companies are desperate for workers.

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Businesses are also retaining workers after struggling to find work following the COVID-19 pandemic. There were 1.7 job openings for every unemployed person in October.

The Fed wants to tighten the labor market to slow inflation and has raised its policy rate by 375 basis points this year from near zero to 3.75%-4.00% in the fastest hike since the 1980s.

Economists expect that the Fed will continue to tighten monetary policy and raise the rate to a level higher than the 4.6% expected in the near future, where it will remain for some time.

Initial and continuing enrollments are expected to rise steadily, driven by white-collar withdrawals.

“There will also be more layoffs among white collar workers because of labor pressures, which are not very tight,” said Nancy Vanden Houten, chief U.S. economist at Oxford Economics in New York. “Businesses are recruiting low-skilled workers because it’s become harder to find and keep them.”

Lucia Mutikani reports; Edited by Dan Burns and Andrea Ricci

Our Standards: Thomson Reuters Trust Principles.

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