US weekly jobless claims reach highest level since August 2023, even as job market remains hot

The number of Americans filing for unemployment benefits hit its highest level in more than eight months last week, another indication that the hot U.S. job market may be slowing.

Jobless claims for the week ending May 4 increased by 22,000 to 231,000, up from 209,000 the previous week, the Labor Department reported Thursday. Although last week’s claims were the highest since the last week of August 2023, this is still a relatively low number of layoffs and does not cause concern.

The four-week claims average, which smooths out some of the weekly volatility, increased by 4,750 to 215,000.

Weekly jobless claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is heading. They have remained at historically low levels since the pandemic wiped out millions of jobs in spring 2020.

Last month, U.S. employers added just 175,000 jobs, the lowest figure in six months and another sign that the job market may be easing. The unemployment rate rose from 3.8% to 3.9% and has now remained below 4% for 27 consecutive months, the longest such streak since the 1960s.

The government also recently announced 8.5 million vacancies in March, the lowest number of vacancies in three years.

A moderation in the pace of hiring, combined with a slowdown in wage growth, could give the Fed the data it was looking for to finally lower interest rates.

The Federal Reserve raised its benchmark borrowing rate 11 times starting in March 2022 in an effort to quell four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession. 19 of 2020. The Fed’s intention was to ease the labor market. market and slow wage growth, which can fuel inflation.

Many economists thought there was a chance that the rapid rise in rates would cause a recession, but jobs remained plentiful and the economy grew thanks to strong spending by U.S. consumers.

Although layoffs remain low, companies have recently announced further job cuts, mainly in the technology and media sectors. Google’s parent company Alphabet, Apple and eBay have all recently announced layoffs.

Outside of technology and media, Peloton, Stellantis, Nike and Tesla recently announced job cuts.

A total of 1.79 million Americans were receiving unemployment benefits during the week ended April 27. This represents an increase of 17,000 compared to the previous week.

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