Friday, May 23, 2025
14.6 C
London

Jobless claims surge, signalling slowdown in labour market

- Advertisement -

The number of Americans filing for unemployment benefits surged to the highest level in 10 months last week. This surge in jobless claims raised concerns about a cooling labour market amid persistently high interest rates.

According to the Labour Department’s report released Thursday, unemployment claims for the week ending June 8 jumped by 13,000 to 242,000, significantly exceeding the analysts’ forecast of 225,000.

This marks the highest level of new claims since August 2023.

The four-week average of claims, which helps to smooth out week-to-week fluctuations, also climbed to 227,000—an increase of 4,750 from the previous week and the highest since September.

- Advertisement -

Jobless cannot secure new employment?

Weekly unemployment claims are a key indicator of layoffs and the broader health of the job market. Despite the recent uptick, claims have generally remained historically low since the massive job losses triggered by the COVID-19 pandemic in early 2020.

“While layoffs remain low, the increase in claims may suggest that those losing their jobs are finding it harder to secure new employment,” explained Nancy Vanden Houten, lead U.S. economist at Oxford Economics. “This would align with a slower pace of hiring and fewer workers voluntarily leaving their jobs.”

Sustained layoffs at this level could influence the Federal Reserve’s interest rate decisions. The Fed has raised its benchmark rate 11 times since March 2022 to combat four-decade-high inflation, aiming to cool an overheated labour market and curb wage growth.

Economists had predicted that these rapid rate hikes might push the economy into recession.

- Advertisement -

Unemployment shoots up

In May, U.S. employers added a robust 272,000 jobs, an uptick from April, indicating continued confidence in the economy despite high interest rates. However, the unemployment rate edged up to 4% in May, ending a 27-month streak of unemployment below 4%, the longest such run since the late 1960s.

Moreover, the number of job openings fell to 8.1 million in April, the lowest since 2021, further signalling a potential slowdown. While layoffs remain low, several high-profile companies, particularly in the tech and media sectors, have announced job cuts.

Currently, 1.82 million Americans are receiving jobless benefits, an increase of 30,000, marking the highest number since early this year.

As the labour market shows signs of cooling, all eyes are on the Federal Reserve and its next moves to balance economic growth and inflation.

- Advertisement -

Sources:

Number of Americans filing for jobless benefits jumps to highest level in 10 months

US weekly jobless claims at 10-month high; inflation cooling

Related Stories:

Accenture to cut 19,000 jobs in downsizing exercise

Immigration controls, job protection, and national identity

LinkedIn cuts 700 jobs and closes China app

- Advertisement -

Hot this week

Kate Middleton expecting twins, according to reports

According to news on the Internet, the Duchess of...

Is BTS’s Taehyung colour blind?

The rumour mill online has been speculating that Korean...

Hurley wore ‘the dress’ after being snubbed by top fashion designers

Model Liz Hurley became famous after wearing "the dress"...

Hyun Bin taking legal action against rumours involving Son Ye Jin

While the hottest K-drama screening on-air is undoubtedly Crash...

HK protesters call for boycott of Ip Man 4: The Finale

Hong Kong -- The final instalment of the Ip...

ChatGPT at two — and OpenAI’s vision for the future

Two years after OpenAI launched ChatGPT, the groundbreaking AI...

Vertical Institute Unveils Generative AI Course to Meet Growing Demand for Digital Proficiency

The future of work is undeniably intertwined with artificial...

Jimmy Carter: The Nobel US president who lived to be 100

Jimmy Carter, the peanut farmer who became the 39th...

Manmohan Singh: The leader who transformed India

Manmohan Singh's story is one of remarkable transformation, both...

Why AI ‘hallucinates’: What’s missing in the models

The American writer Richard Powers' latest novel, Playground, delves...

Challenging job market diminishes appeal of postgraduate studies in China

China is seeing a significant decline in postgraduate entrance...

Fatherhood changing in East Asia: Dads get into parenting and housework

A transformation in fatherhood is quietly unfolding across East...

Related Articles

Popular Categories

spot_img