Labor Market Still Tight Even as More U.S. Citizens File for Unemployment Benefits?


 U.S. Application for jobless claims rose slightly last week but remained at a healthy level with companies refusing to let go of workers in a still-tight labor market.

The number of Americans who filed jobless claims for the week ended May 20 rose by 4,000 to 229,000 from 225,000 in the previous week, according to a Labor Department report on Thursday. The previous week's claims total was revised down by a significant 17,000.

The four-week moving average for jobless claims was unchanged at 231,750 after the previous week's total was revised down by 12,500. Analysts see a steady increase in the four-week average as a sign that layoffs are accelerating.

Overall, 1.8 million people collected unemployment benefits in the week ending May 13, about 5,000 more than the previous week.

Earlier this month, the Fed raised its benchmark lending rate for the 10th time in a row in its bid to cool the economy and lower four-decade high inflation. While the labor market remains in favor of workers, there are some recent signs that the Fed's policy actions are having an impact.

Markets hope that the Fed will end its pause on rate hikes at its next meeting. Minutes from the Fed's last meeting show that Fed officials are split on whether or not to raise its benchmark lending rate.

There has been an increasing number of high-profile layoffs recently, mostly in the technology sector. IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn and DoorDash have all announced layoffs in recent months. Amazon and Meta's parent Facebook have each announced two sets of layoffs since November.