US weekly jobless claims rise to 10-month high

THE number of Americans filing new claims for unemployment benefits increased to a 10-month high last week, pointing to easing labour market conditions.

Initial claims for state unemployment benefits jumped 13,000 to a seasonally adjusted 242,000 for the week ended Jun 8, the highest level since last August, the Labor Department said on Thursday (Jun 13). Economists polled by Reuters had forecast 225,000 claims in the latest week.

The labour market is steadily cooling as the cumulative and delayed effects of the Federal Reserve’s 525 basis points worth of interest rate hikes since 2022 broadly impact the economy.

The unemployment rate increased to a still relatively low 4 per cent in May for the first time since January 2022, while economic growth slowed considerably in the first quarter.

The US central bank on Wednesday kept its benchmark overnight interest rate in the current 5.25 to 5.50 per cent range, where it has been since last July.

Fed officials pushed out the start of rate cuts to perhaps as late as December, with policymakers projecting only a single quarter-percentage-point reduction for this year.

SEE ALSO

US weekly jobless claims fall as labour market tightens, seasonal factors revised

Fed chair Jerome Powell told reporters that “a broad set of indicators suggests that conditions in the labour market have returned to about where they stood on the eve of the pandemic, relatively tight but not overheated”.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 30,000 to a seasonally adjusted 1.820 million during the week ending Jun 1, the claims report showed. REUTERS