The number of Americans applying for unemployment benefits jumped last week, but remain in the same historically healthy range of the past few years despite growing concern over the health of the labour market.
New filings for unemployment benefits in the United States rose sharply last week, though they still sit within the relatively strong range seen over the past several years, even as worries grow about the labour market’s momentum.
For the week ending Dec. 6, initial jobless claims increased by 44,000, reaching 236,000, up from 192,000 the previous week, according to data released Thursday by the Labour Department. The latest figure exceeded economists’ expectations, which had pointed to around 213,000 new claims.
Analysts noted that the prior week’s unusually low number was likely skewed because of the Thanksgiving holiday.
Because jobless claims provide a near-instant snapshot of layoffs, they are widely used as an early gauge of labour market conditions.
Although headline data still suggests a historically resilient job market, the Federal Reserve on Wednesday cut its key interest rate by a quarter-point, its third consecutive reduction.
Fed Chair Jerome Powell said the committee reduced borrowing costs out of concern that the job market is even weaker than it appears. While government data shows that the economy has added a sluggish 40,000 jobs a month since April, Powell said that figure could be revised lower by as much as 60,000. That would mean employers have actually been shedding an average of 20,000 jobs a month since the spring.
“It’s a labor market that seems to have significant downside risks,” Powell told reporters. “People care about that. That’s their jobs.”
Jobless claims figures in recent years have remained in a historically healthy range, suggesting that overall layoffs have been muted despite some high-profile job cuts. Hiring is also sluggish, which makes finding a job for those out of work challenging.
For now, the US job market appears stuck in a “low-hire, low-fire” state that has kept the unemployment rate historically low.
Last week, private payroll data firm ADP estimated US job losses of 32,000 in November. The surprisingly weak report comports with recent government employment data, which has shown a significant decline in job growth since President Donald Trump implemented his sweeping tariffs on U.S. trading partners in April.
Though September had a solid gain of 119,000 jobs, June and August both showed net job losses. The unemployment rate has inched up to 4.4%, its highest level in four years.
November’s comprehensive jobs data has been delayed for release until next week due to the government shutdown.
Job cuts announced recently by large companies such as UPS, General Motors, Amazon and Verizon typically take weeks or months to fully implement and may not be reflected in Thursday’s data.
The total number of Americans filing for jobless benefits for the previous week ending Nov. 29 fell by 99,000 to 1.84 million, the government said. That’s the lowest level for continuing claims since mid-April, but some analysts said the plunge is due to a variety of factors, including seasonal adjustments and the fact that most people aren’t eligible for benefits after 26 weeks.
The Labour Department’s report Thursday showed that the four-week average of claims, which evens out some of the week-to-week volatility, rose by 2,000 to 216,750.
With inputs from agencies
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