U.S. jobless claims hit eight-month high, signalling cooling labour market

The number of Americans filing for new unemployment benefits rose last week to the highest level in more than eight months, indicating a further cooling of the labor market.

According to the Labor Department’s latest weekly jobless claims report, initial claims for state unemployment benefits surged by 22,000 to a seasonally adjusted 231,000 for the week ended May 4.

This marks the highest figure since late August and the most significant increase in nearly four months.

Economists’ expectations exceeded

The rise in unemployment claims exceeded economists’ expectations, who had forecast claims to reach 215,000 for the week.

The claims have now surpassed the range of 194,000 to 225,000 that had been consistent since the beginning of the year, reflecting a shift in labor market conditions.

What does the rise in jobless claims mean?

This uptick in jobless claims follows closely on the heels of other indicators suggesting a slowdown in the labor market.

Last week’s report showed that the economy added the fewest jobs in six months in April, and job openings in March fell to a three-year low.

These signs of ebbing labor market momentum are prompting speculation about potential adjustments to monetary policy, including the possibility of interest rate cuts by the Federal Reserve later this year.

Seasonal factors at play

Part of the increase in jobless claims could be attributed to seasonal variations following the end of school spring breaks, which often lead to fluctuations in employment figures.

This seasonal factor complicates the analysis, making it crucial to observe upcoming data to ascertain the underlying trends in the labor market.

The post U.S. jobless claims hit eight-month high, signalling cooling labour market appeared first on Invezz