Applications for jobless benefits up modestly, but continuing claims reach highest level in 2 years
Slightly more Americans filed for unemployment last week, but the total number of people in the U.S. receiving unemployment benefits rose to the highest level in two years.
Claims for unemployment benefits rose by 7,000 to 218,000 in the week ending Nov. 25, the Labor Department reported Thursday.
However, in the week ending November 18, 1.93 million people received unemployment benefits, about 86,000 more than the previous week and the highest number in two years. Continuing claims have increased in nine of the past 10 weeks.
Claims for unemployment benefits are considered representative of the number of layoffs in a given week.
Analysts say continued claims are rising because many of those already unemployed may now have a harder time finding new work.
And while the labor market remains strong, some weakness is starting to emerge.
Hiring has slowed from the breakneck pace of 2021 and 2022 as the economy recovered from the COVID-19 recession. Employers added a record 606,000 jobs per month in 2021 and nearly 400,000 per month last year. So far in 2023, monthly headcount is still a solid 239,000, but in three of the past five months it has remained below 200,000.
Employers are also posting fewer vacancies.
The Federal Reserve has raised its benchmark interest rate 11 times since March 2022 to slow the economy and rein in inflation, which hit a four-decade high last year. The labor market and economic growth remained surprisingly resilient, defying predictions that the economy would enter a recession this year.
At the same time, inflation has slowed considerably.
The Commerce Department said Thursday that the Federal Reserve’s preferred inflation measure cooled last month, the latest sign that price pressures are easing in the face of high interest rates and moderating economic growth.
Prices remained unchanged from September to October, compared to a 0.4% increase the month before. Compared to a year ago, prices rose 3% in October, down from 3.4% year-on-year in September. It was the lowest annual inflation rate in more than 2.5 years.
Labor’s layoff data on Thursday also showed the four-week moving average of unemployment benefit claims – which smooths out some of the weekly volatility – fell by 500 to 220,000.