US weekly jobless claims rise moderately as labor market remains resilient

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  • Weekly jobless claims rise by 5,000 to 213,000
  • Continuing claims drop 22,000 to 1.379 million

WASHINGTON, Sept 22 (Reuters) – The number of Americans filing new claims for unemployment benefits increased moderately last week, indicating that the labor market remains tight despite the Federal Reserve’s attempt to cool demand with aggressive increases in interest rates.

The Labor Department’s weekly jobless claims report on Thursday, the most recent data on the health of the economy, suggested job growth remained strong this month. The U.S. central bank announced a 75 basis point rate hike on Wednesday, its third consecutive hike of this magnitude. He signaled bigger increases to come this year. Read more

“Fed officials are braking hard, but so far employers are just giving this policy a big yawn and hanging on to their workers,” said Christopher Rupkey, chief economist at FWDBONDS. “It’s either that or there’s some sort of stealth job loss where people who are laid off don’t get unemployment benefits.”

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Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 213,000 for the week ended Sept. 17, the Labor Department said Thursday. Data for the previous week has been revised to show 5,000 fewer applications filed than previously. Economists polled by Reuters had forecast 218,000 applications for the past week.

Fed Chairman Jerome Powell told reporters on Wednesday that “there is only modest evidence that the labor market is cooling,” describing it as continuing “to be unbalanced.” Read more

Since March, the Fed has raised its policy rate by three percentage points to bring it to the current range of 3.00% to 3.25%.

Unadjusted claims rose by 19,385 to a still-low 171,562 last week. There was an increase in requests in Michigan and notable increases in California, Georgia, Massachusetts and New York. Only Indiana reported a significant decrease in deposits.

Economists say companies are hoarding workers after struggling to hire over the past year as the COVID-19 pandemic forced some people out of the labor market, in part due to prolonged illness caused by the virus.

There were 11.2 million job openings at the end of July, with two jobs for every unemployed person.

US stocks opened lower. The dollar appreciated against a basket of currencies. US Treasury prices fell.

NO MATERIAL CHANGES

The claims report covered the period the government surveyed businesses for the non-farm payrolls portion of the September jobs report.

Claims fell by 32,000 between the August and September survey periods. The payroll increased by 315,000 jobs in August. Employment is now 240,000 jobs above its pre-pandemic level.

“There’s no sign here of a change in labor market fundamentals,” said Conrad DeQuadros, senior economic adviser at Brean Capital in New York.

The number of people receiving benefits after a first week of help fell by 22,000 to 1.379 million in the week ending September 10. Next week’s data on so-called continuing claims, an indicator of hiring, will shed more light on the job situation in September.

The Fed on Wednesday raised its median forecast for the unemployment rate this year to 3.8% from its previous forecast of 3.7% in June. It raised its estimate for 2023 to 4.4% from the 3.9% projected in June, a move economists see as recessive. The unemployment rate fell from 3.5% in July to 3.7% in August.

“Historically, a year-over-year increase in the unemployment rate of this magnitude has been followed by a recession,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The jury is still out on whether the Fed can pull off a soft landing.”

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Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao

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