The number of Americans filing new claims for jobless benefits rose more than expected last week, but the labor market remained tight even as demand for labor eased amid higher interest rates.
Initial claims for state jobless benefits rose 29,000 to a seasonally adjusted 219,000 for the week ended Oct. 1, the Labor Department reported earlier. Data for the previous week has been revised to show 3,000 fewer applications filed than previously reported. Economists polled by Reuters had forecast 203,000 applications for the latest week.
The labor market is largely resilient, although some cracks are emerging as the Federal Reserve steps up its monetary policy tightening campaign. U.S. central bank has raised its key rate from near zero earlier this year to the current range of 3.00% to 3.25%.
A separate report Thursday from the firm Challenger, Gray & Christmas showed U.S.-based employers. announced 29,989 job cuts in September, a 46.4% jump from August. Job cuts, led by retailers, increased 67.6% from a year ago. However, when compared to last year, the reduction of workers has dropped by 21% compared to the first nine months of 2021.
Employers also announced plans to hire 380,014 workers last month, the smallest September total since 2011. The government reported on Tuesday that job openings fell by 1.1 million, the biggest decline since April 2020, to 10.1 million on the last day of August. However, economists do not expect widespread layoffs, saying companies are still wary of letting go after struggling to hire last year due to the Covid-19 pandemic, which forced some to quit their jobs.
An Institute for Supply Management survey on Wednesday showed a measure of service sector employment rose in September, with several industries reporting labor shortages.
The claims report showed the number of people receiving benefits after the initial week of aid, a proxy for hiring, rose 15,000 to 1.361 million in the week ending Sept. 24.
It should be noted that this claims report has nothing to do with the September jobs report, which is scheduled to be released on Friday with the market expecting the NFP reading to rise by 250,000 jobs in September.
