WASHINGTON, June 8 (Reuters) – The number of new Americans filing unemployment benefits surged last week to the highest level in more than a year and a half, but the data included the Memorial Day holiday. Therefore, layoffs probably have not accelerated. This may have caused some volatility.
The biggest increase in filings in nearly two years, the Labor Department reported Thursday, came from Ohio, Minnesota and California. Economists cautioned not to read too much into recent increases after fraud ran rampant in Massachusetts, pushing claims to a 18-month high before being corrected in May.
Breen Capital senior economic adviser Conrad Decuadros said: “The surge in claims could be a sign of an increase in layoffs, but given that claims fluctuate from week to week, it’s hard to come to that conclusion. It’s too early to get there,” he said. yoke.
“The modest increase in filings state by state, especially given recent fraud in Massachusetts, suggests we should wait for additional confirmation before concluding that layoffs are on the rise. It is an additional factor.”
First-time state unemployment claims in the week ending June 3 increased by 28,000 seasonally to 261,000, the highest since October 2021. Economists polled by Reuters had expected 235,000 applications in the most recent week.
The number of unreconciled claims last week stood at 219,391 of 10,535, while Ohio filed 6,345 and California filed 5,173. In Minnesota, insurance claims increased by 2,746. Applications have increased in recent weeks in Ohio, which the state sees as the impact of layoffs in the manufacturing, auto, transportation and warehousing industries. Automakers typically close factories in the summer for equipment changes.
“The dates change slightly each year, but some auto plants temporarily close in the summer, which makes it difficult to get an accurate picture of seasonality,” said Gisela Hoja, an economist at Citigroup in New York. rice field.
“This suggests that there may be further volatility in the original billing amounts in the coming months.”
A four-week moving average of filings, considered a better indicator of labor market developments without weekly fluctuations, increased by 7,500 to 237,250.
Economists don’t expect claims data to influence monetary policy. The Fed is expected to keep rates unchanged next Wednesday for the first time since March 2022, when it embarked on its fastest rate hike campaign since the 1980s. The US central bank has since raised its policy rate by 500 basis points.
Wall Street stocks were rising. The dollar fell against a basket of currencies. US Treasury prices rose.
slow down gradually
Matthew Martin, a U.S. economist at Oxford Economics, said the number of applications is still well below our forecast of 305,000 given the lack of monthly employment growth, which will affect the Fed’s monetary policy. It will require a more sustained increase in the level of applications to give it.” new york.
The government last week reported that economic growth added 339,000 jobs in May. The unemployment rate rose to a seven-month high of 3.7% from 3.4% in April, but remains low by historical standards.
Job growth has been driven by service sectors such as leisure and hospitality, but companies are still catching up after struggling to find workers over the past two years. Industries such as healthcare and education have also seen accelerated retirements during the COVID-19 pandemic.
But for some economists, the surge in filings is a reflection of job cuts spreading from the tech sector, which made headlines last year and earlier this year, to interest rate-sensitive industries such as housing, finance and manufacturing, to other sectors of the economy. He pointed out that it suggests that
“Headline layoff announcements typically take time to take effect,” said Stuart Hoffman, senior economic adviser at PNC Financial in Pittsburgh, Pennsylvania. “This delay has contributed to the recent increase in initial filings. The impact of this, along with the ever-widening web of job cuts across the industry, could presage further intensification in the coming months. There is also.”
The labor market is gradually cooling.
The Institute for Supply Management (ISM) reported on Monday that the service sector PMI fell in May, largely due to weak employment. ISM said comments from the service sector ranged from “trying to do more with the same staff” to “hitting hiring until we have a better understanding of where the economy is headed.”
Overall, employers appear reluctant to let workers go as it becomes harder to find workers during the pandemic.
The number of people receiving benefits after the first week of aid, a measure of employment, fell by 37,000 to 1,757,000 in the week ending May 27, according to claims reports. , the lowest level since February.
Low levels of so-called continuing claims suggest that some laid-off workers are still finding jobs easily, with 1.8 vacancies per unemployed person in April.
Reported by Lucia Mutikani.Editing: Chizu Nomiyama, Andrea Ricci
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