Consumer services

US Weekly Unemployment Near Five-Month High; unemployment is at its lowest since 1969

People line up outside a newly reopened career center for in-person appointments in Louisville, U.S., April 15, 2021. REUTERS/Amira Karaoud

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  • Weekly jobless claims increase from 27,000 to 229,000
  • Unadjusted claims increase from 1,008 to 184,604
  • Continuing claims unchanged at 1.306 million

WASHINGTON, June 9 (Reuters) – The number of Americans filing new claims for jobless benefits rose to its highest level in nearly five months last week, but that likely doesn’t mark a significant change in jobless conditions. labor market, which remain very tight.

Thursday’s Labor Department report also showed unemployment numbers remained at a more than 52-year low at the end of May, underscoring the strength of the labor market. The Federal Reserve is set to offer another 50 basis point interest rate hike next Wednesday as it tries to calm demand, including for labor, in its fight against the inflation.

There have been reports of companies freezing hiring or considering layoffs ahead of a recession next year, but overall labor demand remains strong, with 11.4 million job vacancies. employment at the end of April. Economists largely ignored the larger-than-expected rise in claims last week as noise.

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“Widespread difficulties in hiring workers still discourage companies from laying off staff, but pockets of weakness have emerged among some tech startups as well as retailers who have felt the impact of a shift in consumer spending from goods to services” , said Dante DeAntonio, senior economist at Moody’s Analytics in West Chester, Pennsylvania.

Initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 229,000 for the week ended June 4, the highest since mid-January. Economists polled by Reuters had forecast 210,000 applications for the past week.

The data included the Memorial Day holiday. Seasonal factors, the model the government uses to remove seasonal fluctuations from data, expected a drop of 21,362 in unadjusted claims. There is, however, little room for steep declines with unadjusted demands already at very low levels.

Unadjusted claims rose slightly from 1,008 to 184,604 last week. There were notable increases in claims in Florida, Georgia and Pennsylvania, which offset declines in Mississippi and Michigan.

“We can’t be sure if the jump in new jobless claims during the June 4 holiday week is real or not, as the seasonal factor that boosted unseasonally-adjusted claims was a bit aggressive,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

US stocks opened lower. The dollar remained stable against a basket of currencies. US Treasury prices were mixed.

LOCKED IN A CLOSE RANGE

Claims have been stuck in a narrow range since plunging to a more than 53-year low of 166,000 in March. They fell from a record 6.137 million in April 2020.

The government announced last Friday that non-farm payrolls increased by 390,000 jobs in May, with the unemployment rate holding at 3.6% for a third straight month. Economists expect the unemployment rate to fall in the coming months.

The claims report showed the number of people receiving benefits after a first week of help was unchanged at 1.306 million in the week ending May 28. So-called continuing claims are at levels last seen in late 1969. The insured unemployment rate remained at a record low of 0.9% in late May.

“The insured unemployment rate suggests that the official unemployment rate will fall further, potentially closer to 3%,” DeAntonio of Moody’s Analytics said. “Job growth needs to slow to help the Fed achieve a soft landing.”

The US central bank is expected to raise its key rate by another half percentage point in July. The

The Fed has raised the key rate by 75 basis points since March.

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Reporting by Lucia Mutikani Editing by Chizu Nomiyama

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