Recurring US unemployment claims rise to 10-month high
RECURRING applications for US unemployment benefits rose to a 10-month high, suggesting that Americans are having more trouble finding work after losing their jobs.
Such continuing claims, which include people who have already received unemployment benefits for a week or more, rose by some 57,000 to 1.6 million in the week ended Nov 19. This was the biggest jump in a year, and the highest number of continuing claims since February.
Meanwhile, data from the US Department of Labor showed that initial unemployment claims decreased by 16,000 to 225,000 in the week ended Nov 26. This was lower than the median estimate of 235,000 applications in a Bloomberg survey of economists. On an unadjusted basis, initial claims fell by about 50,000 to 198,557 last week, led by California, Texas, Illinois and Georgia.
Unemployment claims data tend to be more volatile around holidays; last week was Thanksgiving in the US. The four-week moving average, which smooths out such volatility, edged up to 228,750.
Economists have been watching continuing claims more closely in recent weeks, as they serve as an indicator of how hard it is for people to find work after losing their jobs. Continuing claims have also been known to hint at upcoming recessions. Although the gauge had risen for the last two months, it was still near historic lows.
The Federal Reserve’s aggressive course of interest-rate hikes this year has yet to significantly dent the labour market, while other parts of the economy have more obviously slowed down. Chairperson Jerome Powell said Wednesday (Nov 30) that demand for workers still far exceeded supply. He added that the central bank would prefer to resolve the imbalance by restraining payrolls growth, rather than via outright job losses.
While there was a wave of layoffs at high-profile technology and banking companies, such layoffs were still largely contained to a few industries. Meanwhile, data out Wednesday showed that job openings declined and wage gains moderated in October. This suggested that demand for workers might be starting to abate.
The data preceded a monthly employment report to be published on Friday. This report is expected to show that US employers scaled back hiring in November and that the unemployment rate remained at 3.7 per cent. BLOOMBERG
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