The number of Americans filing new claims for jobless benefits rose modestly last week, indicating a still-strong labor market despite fears of a deepening recession.
Initial claims for state jobless benefits rose 4,000 to a seasonally adjusted 230,000 for the week ended Dec. 3, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.
Claims tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring. Jobless claims jumped to a three-month high a week before the Thanksgiving holiday.
Despite the increase in layoffs in the technology sector with Twitter, Amazon and Meta, parent Facebook announced thousands of job cuts in November, but it did not significantly change the labor market dynamics.
The government reported last week that the NFP reading rose by 263,000 jobs in November. Economists say tech firms have overhired during the Covid-19 pandemic. On the other hand, small firms are still desperate to find workers.
The business sector is also faced with the same problem, which is the difficulty of finding labor after the Covid-19 pandemic. There were 1.7 job openings for every unemployed person in October.
The Federal Reserve wants to slow the labor market to cool inflation. U.S. central bank has raised its policy rate by 375 basis points this year from near zero to a range of 3.75%-4.00% in the fastest rate hike cycle since the 1980s.
Economists expect the Fed to continue to tighten monetary policy and raise the key rate to a level higher than the recent projection of 4.6%, where it could remain for some time.
The claims report also showed the number of people receiving benefits after the initial week of aid, a proxy for hiring, rose by 62,000 to 1.671 million in the week ended Nov. 26.
