New federal labor data shows U.S. workers filed 263,000 claims for unemployment benefits last week, the highest level since October 2021 and another sign the job market is cooling.
The Department of Labor reported Thursday that claims for the week ending Sept. 6 were up 27,000 from the previous week’s revised level, a major jump that signals layoffs are on the rise. The four-week moving average for those seeking jobless aid is 240,500, an increase of nearly 10,000 from the previous week.
“One datapoint does not make a trend, but markets will see this big uptick in claims as the pop in layoffs that we have been waiting for,” Carl Weinberg, chief economist at High Frequency Economics, said in a research note.
Andrew Stettner, director of economy and jobs at the Century Foundation, a think tank, said in an email that the latest unemployment benefits is one of the “clearest signs yet” that Americans are starting to feel the impact of an ongoing downshift in job growth.
According to a Federal Reserve Bank of New York’s survey released earlier this week, people are growing more concerned about the state of the state of the labor market and the challenges of finding a job. Employers added only 22,000 jobs in August, far below economist forecasts of 80,000, while payroll gains averaged a meager 29,000 per month from June through August.
Yet while the pace of hiring has slowed in recent months, layoffs remain relatively low by historical measures — a trend economists describe as “no hire, no fire.”
Sluggish job growth of late increases the likelihood that the Federal Reserve will cut rates when it meets next week.
“The latest jobless claims data, along with other recent labor market indicators, show signs of a more vulnerable job market and will lead the Federal Reserve to lower interest rates at its meeting next week,” Nancy Vanden Houten, lead U.S. economist with Oxford Economics, said Thursday in a report.
The jump in people applying for jobless benefits comes at a delicate time for the economy, with new government data on Thursday showing that consumer prices rose 2.9% in August from a year ago, up from 2.7% the previous month.
contributed to this report.
