US jobless claims hit the highest level since late 2021
The number of Americans filing new applications for unemployment benefits last week rose to the highest level since late 2021, which indicates that higher interest rates are beginning to affect the labor market.
Today, Thursday, the Labor Department said that new applications for unemployment benefits for the first time increased by 22,000 to a seasonally adjusted level of 264,000 in the week ending May 6, the highest reading since October 2021.
Economists polled by Reuters had forecast 245,000 claims in the latest week.
A significant increase in the number of applications is expected during the second half of the year, as the cumulative effects of the Federal Reserve’s rate hikes on the economy widen.
However, the number of applications is still below the level of 270 thousand to 300 thousand, which economists say indicates a deterioration in the labor market.
On more than one occasion, Jerome Powell, President of the Federal Reserve, confirmed that he would not stop raising interest rates until he saw a decline in employment and an increase in the unemployment rate, considering that the strong labor market plays a major role in the continuation of the high inflation rate in the country.
And last week, government data showed that the unemployment rate in America decreased to 3.4%, its lowest level since 1969.
(Reuters, The New Arab)
2023-05-11 14:47:54
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