First-time applications for unemployment benefits have reached their highest level since late August 2023, a potential sign that a previously robust labor market is changing.
The Labor Department said Thursday that jobless claims for the week ending May 4 rose to a seasonally adjusted 231,000, up 22,000 from the previous quarter and up from the Dow Jones Industrial Average’s estimate of 214,000. exceeded. This is the highest number of claims since August 26, 2023.
The increase in claims follows a series of mostly positive employment reports, although employment in April was lower than expected. The number of job openings is also decreasing, with expectations that the labor market is likely to slow through the year.
The report also showed that continuing claims that were one week late rose to 1.78 million, an increase of 17,000 from the previous week. The four-week rolling average of claims, which helps smooth out weekly fluctuations in numbers, increased by 4,750 from the previous week to 215,000.
“Weekly unemployment claims are one of the most timely indicators that the economy is beginning to deteriorate seriously, and the scale of new layoffs this week is alarming,” said Christopher Rapke, chief economist at FWDBONDS. It looks like it could become a kimono.” “Trends are not set in a week, but if today’s weekly jobless claims numbers are any indication, we can no longer be confident that calm waters lie ahead for the U.S. economy.”
Nonfarm payrolls rose by 175,000 in April, below Wall Street’s expectations of 240,000 and the smallest increase since October 2023. However, the unemployment rate is 3.9% and has remained below 4% since February 2022.
Markets had little reaction to the announcement of jobless claims, with stock market futures slightly negative and Treasury yields mixed.
The number of insurance claims excluding seasonal adjustments was 209,324, an increase of 10.4% from the previous week. New York state alone increased by more than 10,000 people, accounting for more than half of the total increase.
“The decline in claims has become almost monotonous, and while this surprising spike may be temporary, the labor market is “As things return to normal, we expect volatility to increase and claims to increase.” Union.
Federal Reserve officials are keeping a close eye on employment data as they continue efforts to bring inflation back to 2%. “Employment growth remains strong,” policymakers said after the meeting. However, these comments were released before the April employment statistics were released.
The market expects the central bank to start lowering interest rates in September.
