The number of Americans filing new claims for unemployment benefits rose more than expected last week, while not suggesting a material shift in labor market conditions, which remain strong.
Initial claims for national jobless benefits rose 17,000 to a seasonally adjusted 240,000 for the week ended Nov. 19, the Labor Department reported on Wednesday.
Data for the previous week has been revised to show 1,000 more applications filed than previously reported. Economists polled by Reuters had forecast 225,000 claims for the final week.
Claims data was released a day early because of the Thanksgiving holiday on Thursday. Last week's increase was likely technical, with economists noting that the model used by the government to adjust data for seasonal fluctuations typically expects a rise in filings due to temporary company shutdowns related to the holidays.
"Given the disruption in the labor market, employers may not want to fire people even temporarily because employers remain focused on employee retention," said Isfar Munir, an economist at Citigroup. "In general, uncertainty in the coming weeks will be more widespread due to seasonal patterns related to the holiday clash with a still abnormal labor market."
There were increased filings in the technology sector, with Twitter, Amazon (NASDAQ: AMZN ) and META. META announced thousands of job cuts this month.
However, economists do not expect this to be a major drag on the labor market and overall economy, noting that businesses outside of the technology and housing sectors have been compensating for workers after difficulties finding labor following the Covid-19 pandemic.
According to Ryan Sweet, the chief economist of the U.S. at Oxford Economics in West Chester, Pennsylvania, if large-scale layoffs occur this month, they will increase the unemployment rate.
With 1.9 job openings for every unemployed person in September, some laid-off workers may be looking for new jobs. The unemployment rate was 3.7% in October.
The Federal Reserve has raised its key rate by 375 basis points this year from near zero to 3.75%-4.00% to combat high inflation in what has been the fastest rate cycle since the 1980s.
The claims report also showed the number of people receiving benefits after the initial week of aid rose by 48,000 to 1.551 million in the week ending Nov. 12, the claims report showed.
