The fact that the number of Americans filing new claims for unemployment benefits increased last week in a way that was higher than anticipated is further evidence that the labor market was gradually improving as higher borrowing costs slowed economic demand.
Other data released on Thursday by the Labor Department highlighted the economy’s slowing momentum, showing that producer prices fell in March for the first time in nearly three years and that sticky services inflation eased. However, the labor market and inflation may not be cooling sufficiently to prevent the Federal Reserve from raising interest rates once more next month.
Fall of the US Labor Market
Christopher Rupkey, chief economist at FWDBONDS in New York, stated, “Fed officials couldn’t ask for better data today as the economy looks like it is running out of gas finally after a year of rate hikes.” After the banking crisis, Fed officials anticipated that the economy would slow, and it now appears that the slowdown is occurring.
Introductory cases for state joblessness benefits rose 11,000 to an occasionally changed 239,000 for the week finished April 8. Reuters polled economists and found that they expected 232,000 claims for the most recent week.
Last week, unadjusted claims increased by 27,457 to 234,577, and California filings increased by 11,388. New Jersey, Pennsylvania, Texas, New York, and Connecticut also saw significant claims rise. That overcame Ohio’s significant decline.
According to annual revisions to the data that the government released last week, claims were much higher this year than had been anticipated. This coincided with a flurry of high-profile layoffs in technology and other industries that are very sensitive to interest rates.
However, claims are still below the 270,000 thresholds, which, according to economists, would indicate a decline in the labor market. Last Friday’s work report showed a more slow yet at the same time strong speed of occupation development in Spring.
At the end of February, the number of open positions fell below 10 million for the first time in nearly two years. However, there were 1.7 open positions for every unemployed person in that month, which may make it easier for some laid-off workers to find work.