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Jobless claims unexpectedly rise to highest level since August

The number of Americans filing for unemployment benefits unexpectedly ticked higher last week, hitting the highest level in three months.

Figures released Wednesday by the Labor Department show initial claims for the week ended Nov. 19 rose to 240,000 from the upwardly revised 223,000 recorded a week earlier. That is above the 2019 pre-pandemic average of 218,000 claims and marks the highest level since mid-August.

Continuing claims, filed by Americans who are consecutively receiving unemployment benefits, rose slightly to 1.55 million for the week ended November. 12, up by 48,000 from the previous week’s revised level. One year ago, nearly 2.28 million Americans were receiving unemployment benefits.

“Initial claims jumped higher than estimates in the latest week, but that’s not surprising given the high-profile layoffs of thousands of workers from big companies, especially tech firms,” ​​said Robert Frick, corporate economist at Navy Federal Credit Union. “The jobs market remains tight and one week does not make a trend, so this is more likely a blip than a sign of labor market cooling.”

Companies including Amazon, Apple, Lyft, Meta Platforms and Twitter have all announced layoffs.

AMAZON CEO SAYS LAYOFFS WILL CONTINUE IN 2023

Pedestrian passes a “Help Wanted” sign in the door of a hardware store in Cambridge, Mass., July 8, 2022. (Reuters/Brian Snyder / Reuters Photos)

OCTOBER JOBS REPORT SOLID, MAKING FED’S INFLATION FIGHT HARDER

For months, the labor market has remained one of the few bright spots in the economy: The October jobs report showed that employers added 261,000 new jobs last month, a solid figure that suggests hiring remains strong.

But it may not last long: The Federal Reserve is raising interest rates at the fastest pace in decades as it tries to crush runaway inflation. Although the labor market is still healthy, both the housing and manufacturing sectors are weakening and inflation remains painfully high.

Policymakers have already approved six straight rate increases and have indicated that more hikes are to come as they try to cool the economy — and the labor market. The Fed releases minutes of the Nov. 1-2 policy meeting on Wednesday afternoon.

THE FED’S WAR ON INFLATION COULD COST 1M JOBS

People gather outside the unemployment center

People queue outside a newly reopened career center for in-person appointments in Louisville, Ky, April 15, 2021. (Reuters/Amira Karaoud)

DEMOCRATS SLAM ‘DANGEROUS’ FED RATE HIKES, WARNING OF WIDESPREAD JOB LOSSES

Fed policymakers have made it clear that they anticipate unemployment to climb as a result of higher rates, which could force consumers and businesses to pull back on spending.

Updated projections from the central bank’s September meeting show that officials expect unemployment to climb to 4.4% by the end of next year, up from the current rate of 3.7%.

That could mean roughly 1 million Americans lose their jobs between now and the end of 2023. Other analyzes — including one from Deutsche Bank — show unemployment climbing as high as 6% as a result of the Fed’s interest rate hikes.

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There are some signs the labor market is starting to soften with a plethora of big tech companies slashing thousands of jobs in recent weeks as they brace for a possible recession.

Ticker Security Last Change Change %
AMZN AMAZON.COM INC. 93.42 +0.22 +0.24%
AAPL APPLE INC. 149.99 -0.20 -0.13%
Lyft Lyft Inc. 11.09 +0.04 +0.32%
META META PLATFORMS INC. 111.50 +0.06 +0.05%

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