The number of Americans filing for unemployment benefits jumped to a 10-month high last week, another possible sign that the labor market is loosening under the weight of high interest rates.
Claims for unemployment benefits for the week ending June 8 increased by 13,000 to 242,000, compared to 229,000 the previous week, the Labor Department reported Thursday. That’s considerably higher than the 225,000 claims analysts expected and the most since August 2023.
The average claims over a four-week period, which offsets a portion of week-to-week turnover, rose to 227,000, an increase of 4,750 from the previous week and the highest since September.
Weekly aid claims 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. They have remained at historically low levels since millions of jobs disappeared when the COVID-19 pandemic hit the United States in the spring of 2020.
Although this week’s figure appears relatively high, it still remains within a range that reflects a healthy labor market. However, sustained layoffs at this level could have some influence on Federal Reserve officials, who closely monitor the labor market when considering interest rate decisions.
The Federal Reserve raised its benchmark lending rate 11 times starting in March 2022 in an attempt to extinguish four-decade high inflation that took hold after the economy recovered from the 2020 COVID-19 recession. The Fed’s intention was to cool an overly active labor market and reduce wage growth, which can fuel inflation.
