The number of Americans filing initial unemployment claims fell by 4,000 to 226,000 for the week ended June 13. The official report from the US Department of Labor indicates that the rate of layoffs remains low, providing a solid foundation for the domestic labor market.
Although the claims figure was at the top of the annual forecast of between 190,000 and 230,000, the employment sector appears to have successfully rebuilt its growth momentum. The recovery was driven by three consecutive months of strong hiring, which managed to keep the unemployment rate stable at 4.3%.
Despite the stability of labor, the Federal Reserve (Fed) on Thursday chose to maintain its benchmark interest rate in the range of 3.50% to 3.75%. However, the new Fed Chairman, Kevin Warsh, hinted that the central bank is likely to raise borrowing costs before the end of the year due to rising inflation risks.
Nonfarm payrolls data for May recorded a growth of 172,000 jobs. Economists assess that much of the strength of this data is a direct result of companies refraining from laying off staff, rather than due to the rapid opening of new business operations.
However, market surveys show that the unemployed are now facing difficulties in finding new jobs with claims continuing to increase to 1.81 million people. In fact, the median duration of unemployment in the US jumped to 11.6 weeks in May, the longest phase ever recorded since November 2021.
