The number of Americans filing new claims for unemployment benefits rose moderately last week, suggesting the labor market continues to cool steadily.
Initial claims for state unemployment benefits increased by 9,000 to 224,000 in the week ended Nov. 30, according to seasonally adjusted figures, the Labor Department reported Thursday. Economists polled by Reuters had forecast 215,000 claims for the final week.
Claims are at levels consistent with steady employment growth, and have signaled a strong rebound in nonfarm payrolls in November, after the labor market was severely distorted by hurricanes Helene and Milton, as well as strikes. of workers at Boeing BA.N and another aerospace company.
Nonfarm payrolls likely rose by 200,000 jobs in November after rising by 12,000 in October, the lowest since December 2020, according to a Reuters poll.
Layoffs, historically low, explain most of the labor market’s strength. The Federal Reserve’s sharp interest rate hikes in 2022 and 2023 to tame inflation have left companies with little appetite to hire more workers.
The Fed’s Beige Book report on Wednesday described employment as “flat or increasing slightly” across all US central bank districts in November. It also noted that “hiring activity was moderate, as worker turnover remained low and few companies reported an increase in their workforce,” and added that “the level of layoffs was also low.”
The slow pace of hiring means that many people who have lost their jobs remain on the unemployment rolls longer. The number of people receiving benefits after an initial week of aid, an indicator of hiring, fell by 25,000 to 1.871 million during the week ending Nov. 23, according to seasonally adjusted figures, the report showed.
Although the data does not influence the November employment report, since it is outside the survey period, the persistent increase in so-called continuous applications represents an upward risk for the unemployment rate. The unemployment rate is expected to rise to 4.2% last month, from 4.1% in October.
The market expects the Federal Reserve to cut rates this month for the third time since it began its easing cycle in September. The central bank’s official interest rate is between 4.50% and 4.75%, after having risen 525 basis points in 2022 and 2023.
The 2025 rate outlook is uncertain amid threats of tariffs and promises of tax cuts from President-elect Donald Trump’s incoming administration, which economists say would raise prices and increase public borrowing.
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