U.S. Jobless Claims Rose Above Prepandemic Average Last Week
New applications for unemployment benefits rose last week above their prepandemic average for the first time since January, adding to signs the hot labor market could be starting to cool a little.
Initial jobless claims, a proxy for layoffs, increased by 27,000 to 229,000 last week from the previous week’s revised level of 202,000, the Labor Department said Thursday. Claims had been at or below the 2019 average of 218,000 since late January.
The four-week average of new claims, which smooths volatility in the weekly figures, also rose slightly to 215,000 last week. That figure had been increasing since early April until late May when it inched lower.
Continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, remained at 1.3 million in the week ended May 28—the lowest point since December 1969. Continuing claims are reported with a one-week lag.
The U.S. labor market remains strong but is showing some initial signs of cooling. U.S. employers added 390,000 jobs in May—a robust gain that also was below the average monthly pace of growth over the past year. The unemployment rate held steady at 3.6%, nearly matching the half-decade low reached right before the pandemic hit the U.S. in the spring of 2020.
There were a seasonally adjusted 11.4 million job openings in April, a decrease of nearly half a million from the prior month, but still historically elevated. The number of times workers quit their jobs reached 4.4 million in April and the level of layoffs and discharges reached 1.2 million that month, which was the lowest on records dating back to 2000.
While the labor market remains robust, fears of a potential slowdown in the economy might spur layoffs as employers plan for the future, said Giacomo Santangelo, an economist at jobs site Monster.
“When you hear there’s a tropical depression, there’s a chance there’s going to be a hurricane, so you go out and you start preparing. Companies are going to start getting ready for a potential hurricane that’s coming,” Mr. Santangelo said.
Major technology companies such as
Twitter Inc.
and
Netflix Inc.
have announced hiring freezes or staff cuts as the industry retrenches.
Tesla Inc.
boss
recently told his staff he planned to reduce salaried jobs.
The Federal Reserve is increasing interest rates to tame high inflation, which inched lower to an annual 8.3% rate in April. Economists surveyed by The Wall Street Journal estimate the consumer-price index remained at 8.3% in May.
Mr. Santangelo said that whenever employers begin to shed workers, part-time workers will be first on the chopping block.
“Firms don’t want to lose out, they still want to make money. That may mean shaving off the part-time workers, and just trying to stick with more of a skeleton crew,” he said.
Write to Bryan Mena at bryan.mena@wsj.com
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