New claims for U.S. unemployment benefits unexpectedly rose last week, yet the labor market remained tight amid labor shortages and the number of unemployed Americans at their lowest level since 1969 in early May.
Preliminary claims for state unemployment benefits rose 21,000 to 218,000 for the week ended May 14, the highest level since January, the Labor Department said on Thursday. The reading also surpassed the forecast of Reuters economists who forecast 200,000 applications for the week.
While total unemployment claims are at their lowest level in more than 53 years since March, the labor market is getting tighter and generating strong wage gains that are helping to lift overall inflation in the economy.
These high price pressures have forced the Federal Reserve to adopt a high monetary policy stance. U.S. central bank has raised its policy interest rate by 75 basis points since March. The Fed is expected to raise the overnight rate by half a percentage point at each subsequent meeting in June and July.
The latest records show there were 11.5 million jobs on offer at the end of March. Claims fell from an all -time high of 6.137 million in early April 2020. Unemployment claims increased between the April and May review periods. The number of jobs increased by 428,000 in April, the 12th consecutive month of more than 400,000 jobs.
The mid -May unemployment data to be released next week will shed more light on the state of employment growth this month.
A handful of analysts interpreted that U.S. economic growth was slowing with rising unemployment demands and initial questionnaires predicting manufacturing activity would decline.
