Applications for unemployment benefits in the United States increased for the first time in six weeks, although continuing claims declined, indicating some softening in a labor market that remained generally resilient.
Initial applications for unemployment jumped by 13,000 to 242,000 in the week ending April 29, according to Labor Department data released Thursday. According to a Bloomberg survey of economists, the median expectation was for 240,000 applications.
Continuing claims, which include people who have received unemployment benefits for a week or more and are a good indicator of how difficult it is for people to find work after losing their jobs, decreased by 38,000 in the week ending April 22 to 1.81 million. This was the largest dip since July.
Fed officials expected to pause tightening campaign as US job market cools at a slower rate than other indicators
Even if the job market begins to deteriorate, it is still cooling at a considerably slower rate than other economic indicators in the aftermath of the Federal Reserve’s strong tightening campaign.
Following a quarter-point increase in interest rates on Wednesday, Fed officials are expected to pause their tightening campaign and allow the higher borrowing costs to work their way through the economy, which they hope will eventually translate into some cooling in the job market.
Unadjusted claims declined by nearly 5,500 to 219,619. New York led the way, with Illinois following closely behind. Data can be erratic from week to week. The four-week moving average in initial claims increased to 239,250, smoothing out some of the volatility.
Shopify Inc. and Morgan Stanley were among the most recent companies to announce high-profile layoffs this week, joining a long list of companies attempting to slash expenses in an environment of decreasing demand.
US job layoffs increase in April, while businesses reduce employment plans for the year
According to data released Thursday by research firm Challenger, Gray & Christmas Inc., US firms disclosed approximately 67,000 job layoffs last month, increasing the total this year to almost 340,000. This is nearly four times what it was in the first four months of 2022. At the same time, businesses reduced their employment plans for the year to the lowest level since 2016.
Separate data released earlier this week painted a mixed picture of the labor market’s direction. While vacancies at US employers fell more than expected in March and layoffs increased, another report showed that private payrolls rose by the most in nine months in April.
Economists anticipate that the Labor Department’s monthly jobs report on Friday will reveal that employers reduced hiring and the unemployment rate increased slightly from record low levels last month.