The number of Americans filing new claims for jobless benefits increased moderately last week, while unemployment rolls hit a 10-month high towards the end of November, suggesting the labor market was gradually slowing down, APA reports citing Reuters.
Still, labor market conditions remain tight, keeping the Federal Reserve on course to continue increasing interest rates as it fights inflation. The labor market has remained resilient in the face of growing recession risks, caused by the Fed's aggressive monetary policy campaign.
"Overall, the labor market remains tight and demand for workers is strong," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. "But the claims data are suggesting a very gradual shift up in layoffs." Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 230,000 for the week ended Dec. 3. Last week's increase was in line with economists' expectations.
Claims tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring, which can make it hard to get a clear read of the labor market. They shot up to a three-month high a week before the Thanksgiving holiday, only to almost unwind the surge in the following week.