The number of Americans applying for new jobless benefits rose modestly last week, indicating that the labor market remains tight even as the Federal Reserve sought to cool demand with aggressive tax cuts.
The Labor Department’s weekly jobless claims report released Thursday, the most recent information on the health of the economy, showed that job growth held steady this month. The US Federal Reserve raised interest rates by 75 basis points on Wednesday, the third consecutive increase of the same size. That meant more big climbs were coming this year.
“Federal Reserve officials are hitting the brakes hard, but so far employers have just given policy a big yawn and are holding tight to their workers,” said Christopher Rupkey, chief economist at FWDBONDS. “Or it is about some kind of secret work, where the unemployed do not receive unemployment benefits.”
In the week ended Sept. 17, Initial claims for state unemployment benefits rose by 5,000 to a seasonally adjusted 213,000, the Labor Department said Thursday. Last week’s data was adjusted so that there were 5,000 fewer applications than previously reported. Economists polled by Reuters had forecast 218,000 filings last week.
Federal Reserve Chairman Jerome Powell told reporters on Wednesday that “there is only modest evidence that the labor market is cooling” and described it as still “unbalanced.” read more Since March, the Fed has raised the benchmark interest rate by three percentage points to the current range of 3.00 to 3.25 percent.
Unadjusted claims were up 19,385 last week and are still lower at 171,562. Claims increased in Michigan, with significant increases in California, Georgia, Massachusetts, and New York. Only Indiana reported a significant drop in applications.
Economists say companies are hoarding workers after struggling to hire last year when the COVID-19 pandemic forced some people out of the workforce due to long-term illnesses caused by the virus. At the end of July, there were 11.2 million open jobs, two jobs for every unemployed person.
United States stocks opened lower. The United States dollar rose against a basket of currencies. US Treasury taxes fell.
THERE IS NO EXCHANGE OF MATERIALS
The earnings report covered the period during which the government surveyed businesses on nonfarm payrolls in the September employment report.
Applications decreased by 32,000 between the August and September academic periods. The payroll increased by 315,000 jobs in August. Employment is now 240,000 positions higher than pre-pandemic levels.
“There are no signs of a change in labor market fundamentals,” said Conrad DeQuadros, a senior financial adviser at Brean Capital in New York.
After the first week of relief, the number of people receiving benefits fell by 22,000 to 1.379 million in the week ending September 10. Next week’s data on so-called continuous claims, a measure of employment, will shed more light on September’s employment picture.
The Fed on Wednesday raised its median forecast for this year’s unemployment rate to 3.8 percent from 3.7 percent in June. He raised his forecast for 2023 too. percent from a June forecast of 3.9 percent, which economists considered a recession. The unemployment rate rose from 3.5 percent in August to 3.7 percent in July.
“Historically, a one-year increase in unemployment of this magnitude has been followed by a recession,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The jury is still out on whether the Fed can make a soft landing.”