US weekly jobless claims unexpectedly rise
The U. S. Department of Labor released a report showing that the level of new claims for unemployment benefits increased again last week and more people were receiving benefits at the end of November as compared to the start of the year due to the slow down in labor market.
The number of initial claims for state unemployment benefits went up by 17,000 to a seasonally adjusted 242,000 for the week that ended on 7 th December as reported by the Labor Department on Thursday. The unemployment claims data for last week’s release came in at 220,000, which was the forecast by the economists polled.
Last week’s increase in claims is most likely due to fluctuations after the Thanksgiving holiday and it is unlikely that it marks a change in labour market trends.
The claims are expected to remain unsteady in the following weeks/ months which makes it difficult to gauge the condition of the labor market despite the current volatility.
Though job creation picked up significantly in November after having been significantly limited by strikes and hurricanes in October, unemployment rate increased to 4. 2% after being stable at 4. 1% for two consecutive months.
These are happenings in the labor market which increase the chances that the Federal Reserve will reduce interest rates for the third time since September this year despite the fact that inflation has not reached the 2% target level in the recent months.
The federal funds rate which is the benchmark overnight interest rate has been raised to the 4. 50 % to 4. 75 % band, following a total of 5. 25 percentage points increase from March 2022 to July 2023 with the aim of controlling inflation.
The labor market is generally stable and this is because there are no laying off of employees, which has boosted consumer spending.
The number of people receiving benefits after an initial week of aid which is seen as a measure of hiring rose by 15,000 to a seasonally adjusted 1. 886 million during the week that ended November 30, the claims report released yesterday showed.
This indicates that some of the unemployed persons are being unemployed for longer periods than they used to be.
The median duration of unemployment spells went to the highest level in almost three years in November.
Shandor Brenner is an American journalist recognized for his sharp and insightful reporting on social and political issues. His work is known for its depth, integrity, and the ability to highlight critical societal concerns.