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U.S. weekly jobless claims rise more than expected

reuters.com · 06/09/2022 08:37
U.S. weekly jobless claims rise more than expected

- The number of Americans filing new claims for unemployment benefits increased more than expected last week, but remaining at a level consistent with a tight labor market.

Initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 229,000 for the week ended June 4, the Labor Department said on Thursday. Economists polled by Reuters had forecast 210,000 applications for the latest week.

The data included the Memorial Day holiday. The seasonal factors, the model that the government uses to strip out seasonal fluctuations from the data, normally expects a large decline in applications in the period around the holiday.

There is, however, limited room for big decreases with unadjusted claims already at very low levels.

"We would expect some or all of this week's uptick to be reversed in next Thursday's report as the holiday-week effect fades," said Lou Crandall, chief economist at Wrightson ICAP.

Claims have been locked in a tight range since plunging to a more than a 53-year low of 166,000 in March. They have tumbled from a record high of 6.137 million in April 2020.

The Federal Reserve is tightening monetary policy to cool demand, including for labor, as it battles high inflation. The government reported last Friday that nonfarm payrolls increased by 390,000 jobs in May, with the unemployment rate holding steady at 3.6% for a third straight month.

While there have been reports of companies freezing hiring or contemplating layoffs in anticipation of a recession next year, demand for labor remains strong, with 11.4 million job openings at end of April.

The Fed is expected to raise its policy interest rate by another 50 basis points next Wednesday. An additional half a percentage point hike is anticipated in July.

The U.S. central bank has increased the overnight rate by 75 basis points since March. The claims report showed the number of people receiving benefits after an initial week of aid was unchanged at 1.306 million during the week ending May 28.

(Reporting by Lucia Mutikani
Editing by Chizu Nomiyama)