Labour Department It reported on Thursday that jobless claims applications for the week ending April 29 rose 13,000 to 242,000 from 229,000 the previous week. The number of weekly claims is considered a proxy for layoffs.
The four-week moving average of claims, which measures week-to-week volatility, rose by 3,500 to 239,250.
Overall, 1.81 million people were collecting unemployment benefits in the week ending April 22, about 38,0000 fewer than the previous week.
American workers are enjoying unusual job security despite rising interest rates, economic uncertainty and fears of an impending recession.
Federal Reserve raises key rate but signals it may pause
As expected, the Fed raised its benchmark interest rate by another quarter point on Wednesday, in the ongoing inflation battle. One of the Fed’s goals for raising interest rates 10 times over the past 14 months is to cool the job market and halt rising wages. Until recently, there was little evidence that central bank actions were working on the labor market. But cracks may be starting to show.
The unemployment rate came in at 3.5% last month, up from January’s half-century low of 3.4%. Employers added 236,000 jobs in March, down from 472,000 in January and 326,000 in February, but still strong by historical standards.
Another sign that the labor market may be cooling came on Tuesday when the government reported that US job openings fell in March to the lowest level in nearly two years.
Analysts expect Friday’s April jobs report to show that US employers added 180,000 jobs last month, a relatively low figure compared to mostly rapid job growth over the past few years.
The Fed is hoping to achieve a so-called soft landing – reducing growth to bring inflation under control without causing a recession. Economists are skeptical, with many expecting the US to enter a recession later this year.
Last week, the Commerce Department reported that the US economy slowed sharply from January to March, shrinking at just a 1.1% annual pace as higher interest rates hammered the housing market and businesses reduced inventory.
The number of layoffs has increased in recent months, mostly in the technology sector, where companies added jobs at a rapid pace during the pandemic. IBM, Microsoft, Salesforce, Twitter, Lyft and DoorDash have all announced layoffs in recent months. Amazon and Facebook have announced two sets of job cuts since November.
But it is not just the tech sector that is laying off employees. McDonald’s, Morgan Stanley and 3M also announced layoffs recently.