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weekly jobless claims at highest since November

weekly jobless claims at highest since November

Weekly jobless claims rose again last week in the United States, and reached their highest level since November 2021, despite employers continuing to struggle to find workers. From July 10 to 16, 251,000 people applied for unemployment benefits, up 7,000 from the previous week, according to Labor Department data released Thursday. This is much more than the expectations of economists who expected a drop to 240,000. In total, nearly 1.4 million people received unemployment benefit during the week of July 3 to 9, up 51,000 over a week, according to data published with a week lag.

However, this increase is notsignificantaccording to economist Ian Shepherdson of Pantheon Macroeconomics, who points out that “the numbers are skewed“by the annual closures of production lines at car manufacturers, “which poses problems for seasonal adjustment as the timing and extent of shutdowns vary from year to year“. “The underlying trend will reappear when the distortions fade in early August“, he adds, believing that there should only be”a slight increase from the trend of 230,000 before the closings in the automotive sector, the level of registrations remaining very low by historical standards“.

Since the spring of 2021, employers, faced with labor shortages and massive resignations every month, have been hesitant to lay off and instead offer improved salary conditions to retain employees and recruit new employees. “The Fed’s rate hikes – aimed not only at reducing inflation but also at rebalancing the supply and demand for workers – are expected to lead to easing labor market conditions and a further increase in layoffs in the coming months.», notes for her part Rubeela Farooqi, chief economist of High Frequency Economics. The American central bank has in fact gradually raised its key rates since March, to slow down consumption, and therefore inflation, which has been at its highest for 40 years.

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