A minor increase in the number of Americans submitting new applications for unemployment benefits was observed at the beginning of December, indicating that the labor market is still tight and robust even after mounting concerns about a potential recession as the US Federal Reserve fights to dampen demand, Al Jazeera reported.

Despite the fact that unemployment rolls increased to a 10-month high in late November, according to the US Department of Labor's weekly report on jobless claims released on Thursday, Dec. 8, economists advised against making too much of the development because the data are erratic at this time of year.

The US central bank is expected to continue raising interest rates for some time due to the tight labor market and resilience.

For the week ending Dec. 3, initial claims for state unemployment benefits increased by 4,000 to a seasonally adjusted 230,000. The increase at the beginning of December was in line with what economists had predicted. Claims are well below the 270,000 barriers, which experts said would signal a problem with the labor market.

As businesses temporarily close or slow hiring during the beginning of the holiday season, claims tend to be erratic, making it challenging to gain a comprehensive picture of the labor market. They shot up to a three-month high a week before the Thanksgiving holiday, only to almost unwind the surge in the following week.

In spite of all this, layoffs have been on the rise in the technology sector, with Twitter, Amazon, and Meta, the parent of Facebook, announcing thousands of job cuts in November.

Unadjusted claims jumped 87,113 to 286,436 last week, driven by large increases in California, New York, Georgia, and Texas. There were also notable rises in Illinois, Pennsylvania, Indiana, Ohio, New Jersey, and Washington state.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 62,000 to 1.671 million in the week ending Nov. 26, the claims data showed. That was the highest level in continuing claims since February.

People receiving jobless benefits now face a higher unemployment rate, the highest since March, rising to 1.2 percent. As a result, it could be taking the unemployed a little longer to obtain employment.

Wall Street stocks were trading higher. The dollar fell against a basket of currencies. US Treasury yields rose.

Washington DC Capitol US Flag
Representation image. Valerio Rosati under Creative Commons

© 2024 Latin Times. All rights reserved. Do not reproduce without permission.