US jobless claims edged up last week

WASHINGTON – Slightly more Americans filed for unemployment benefits last week, but the job market remains one of the strongest parts of the US economy.

Jobless claims rose to 230,000 in the week ended Dec. 3, up 4,000 from the previous week’s 226,000, the Labor Department reported Thursday. The four-week moving average of claims, which smoothes week-to-week volatility, rose 1,000 to 230,000.

About 1.67 million people received unemployment benefits in the week ended November 26, up 62,000 from the week before. That’s the highest level in 10 months, but still historically low.

Jobless claims are viewed as proxies for layoffs and when combined with other employment data show that American workers currently enjoy exceptional job security. And that’s despite an economy that some see could slide into recession due to aggressive action by the Federal Reserve trying to cool the economy by raising interest rates.

The Federal Reserve has raised interest rates six times since Marchsending the housing market into a downturn under the strain of mortgage rates, which more than doubled from a year earlier. Many economists expect the United States to slip into recession over the next year, with further Fed rate hikes expected to increase borrowing costs and slow economic activity.

Last month, the Fed raised its short-term interest rate by another 0.75 percentage point for the fourth time this year, three times the usual range. Its policy rate is now in a range of 3.75% to 4%, its highest level in 15 years.

Last week Fed Chair Jerome Powell said the central bank would push interest rates down higher than previously expected and leave them there for an extended period of time until inflation was brought under control. Powell added that the size and pace of those hikes could be a three-quarter-point cut from the jumbo hikes the Fed made at its last four meetings.

Most observers are forecasting the Fed to hike rates another half-point at its last meeting of 2022 next week.

Despite persistent inflation and rapidly rising interest rates, US employers 263,000 jobs added in the last month. There are almost two job openings for every unemployed American. The unemployment rate is 3.7%, a few ticks above a half-century low.

Last year, the economy added a record 6.7 million jobs, and from January to July this year, an average of 457,000 more were added each month. Since then, the number of new hires has cooled to an average of 277,000 per month from August to November, which is still far too hot for the Fed.

Weekly jobless claims were extremely low earlier this year – staying below 200k for much of February, March and April. They started rising in late spring and reached 261k in mid-July before trending lower again.

The tech and real estate sectors were outliers in an otherwise resilient job market, with Facebook, Twitter, Amazon, DoorDash, BuzzFeed, Redfin and Compass all announcing significant layoffs in recent months.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission. US jobless claims edged up last week

Sarah Y. Kim

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