The number of Americans filing for unemployment benefits increased last week, but layoffs remain at healthy levels despite prolonged inflation and high interest rates.
There were 8,000 more claims for unemployment benefits in the week ending June 1, reaching 229,000, compared to 221,000 the week before, the Labor Department reported Thursday.
The average claims over a four-week period, which offsets a portion of week-to-week turnover, fell to 222,250, a small decrease of 750 compared to the previous week.
Weekly claims for unemployment benefits are considered a proxy for the number of layoffs in the United States in a given week, and a sign of where the labor market is headed. This number has remained at historically low levels since the disappearance of millions of jobs when the COVID-19 pandemic reached the United States in the spring of 2020.
The Federal Reserve raised its benchmark lending rate 11 times starting in March 2022 in an attempt to extinguish inflation, which was at its highest level in four decades and persisted after the economy recovered from the recession. caused by COVID-19 in 2020. The Fed’s intention was to cool an overly active labor market and reduce wage growth, which can fuel inflation.
Many economists expected the rapid increases in rates to trigger a recession, but that has been averted so far thanks to strong consumer demand and a stronger-than-expected labor market.
In April, U.S. employers added just 175,000 jobs, the lowest amount in six months and a sign that the labor market may finally be cooling. The unemployment rate rose slightly, from 3.8% to 3.9%, and has remained below 4% for 27 straight months, the longest such streak since the 1960s. The Labor Department will release its May jobs report on Friday. Analysts forecast that employers added 180,000 jobs last month.
