US jobless claims up modestly last week
Dec 8, 2022, 6:38 AM | Updated: 4:08 pm
WASHINGTON (AP) — Slightly more Americans filed for jobless claims last week but the labor market remains one of strongest parts of the U.S. economy.
Applications for unemployment benefits rose to 230,000 for the week ending Dec. 3, up by 4,000 from the previous week’s 226,000, the Labor Department reported Thursday. The four-week moving average of claims, which smooths out week-to-week volatility, rose by 1,000 to 230,000.
About 1.67 million people were receiving jobless aid the week that ended Nov. 26, up 62,000 from the week before. That’s the most in 10 months, but still historically low.
Jobless claims are seen as a proxy for layoffs, and combined with other employment data, show that American workers are enjoying extraordinary job security at the moment. That’s despite an economy some see in danger of tipping into a recession due to the aggressive actions of the Federal Reserve, which is trying to cool the economy by raising interest rates.
The Federal Reserve has raised its benchmark interest rate six times since March, sending the housing market into a downturn under the strain of mortgage rates that have more than doubled from a year ago. Many economists expect the United States to slip into a recession next year with more Fed rate hikes expected to increase borrowing costs and slow economic activity.
Last month, the Fed raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years.
Last week, Fed Chair Jerome Powell said the central bank would push interest rates higher than previously expected and keep them there for an extended period until inflation was under control. Powell added that the size and pace of those increases could be scaled back from the jumbo three-quarters of a point increases the Fed made at its last four meetings.
Most observers forecast that the Fed will raise rates by another half-point at its final meeting of 2022 next week.
In spite of persistent inflation and rapidly rising interest rates, U.S. employers added 263,000 jobs last month. There are nearly two job openings for every unemployed American. The unemployment rate is 3.7%, a couple of ticks above a half-century low.
Last year, the economy added a record 6.7 million jobs, and it tacked on an average of 457,000 a month more from January through July this year. Since then, hiring has cooled to a monthly average of 277,000 from August through November, still way too hot for the Fed.
New weekly applications for unemployment benefits have been extremely low early this year — staying below 200,000 for much of February, March and April. They began to tick up in late spring and hit 261,000 in mid-July before trending lower again.
The tech and real estate sectors have been outliers in an otherwise robust employment market, with Facebook, Twitter, Amazon, DoorDash, BuzzFeed, Redfin and Compass all announcing significant layoffs in recent months.
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