The initial filings for unemployment benefits in the US have hit the highest level since August 2023. It can be a sign that the otherwise strong labor market will be experiencing a huge change.
According to recent data, the number of jobless claims in the US totaled over 231,000 for the week ending on May 4. This means that it has risen by more than 22,000 from the previous estimate by the Labor Department.
The increase in these claims follows a string of mostly strong hiring reports. Besides, the number of job openings has been on a steady decline amid expectations that the labor market is more than likely to be slow for the year.
Weekly jobless claims are one of the timeliest indicators of when the economy is starting to undergo serious deterioration, and the magnitude of new layoffs this week looks worrisome,” wrote Christopher Rupkey, chief economist at FWDBONDS. “One week does not a trend make, but we can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.
Aside from this, the markets have been reacting to the jobless claims release, with the stock market veering towards a more negative performance and the Treasury Yields results have been mixed.
Federal Reserve officials are closely watching the jobs numbers as they continue efforts to bring inflation back to 2%. Following their meeting, policymakers noted that “job gains have remained strong.” But those remarks came before the April employment report release.
