US weekly jobless claims increased more than anticipated
The number of Americans who applied for jobless claims for the first time last week rose more than anticipated, but the underlying trend continued to point to a tight labor market.
The Labor Department said on Thursday that initial applications for state jobless claims increased by 21,000 to a seasonally adjusted 211,000 for the week ending March 4. 195,000 claims were predicted by economists surveyed by Reuters for the mostly recent week.
For seven consecutive weeks, claims have been below 200,000, showing that high-profile job losses in the technology sector have not significantly affected the labor market.
According to data released on Wednesday, there were 1.9 vacant positions for every unemployed person in January. The labor market was regarded as continuing to be "strong" in the Fed's Beige Book for February, with "scattered reports of layoffs" and the fact that "identifying personnel with needed skills or experience remained tough," also being noted.
Jerome Powell, the chairman of the Federal Reserve, warned legislators this week that the U.S. central bank will probably need to raise interest rates more than anticipated due to the continuously tight job market, high inflation readings, and robust consumer spending in January.
According to the FedWatch tool from CME Group, financial markets have already factored in a rate increase of 50 basis points at the Fed's policy meeting on March 21–22.
Since last March, the Fed has raised its policy rate by 450 basis points, moving it from near zero to a range of 4.50%–4.75%.
According to the claims report, the number of people getting benefits after a first week of assistance—a proxy for hiring—rose by 69,000 to 1.718 million during the week ending February 25. The so-called continuing claims are still at a low level, which suggests some laid-off workers would have little trouble finding new employment.
The claims data has no impact on the employment report for February, which will be released on Friday, because it is outside the sampling period.
After rising by 517,000 in January, nonfarm payrolls are expected to have grown by 205,000 jobs in February, according to a Reuters survey of economists. The unemployment rate is expected to remain the same at a more than 53 1/2 year low of 3.4%
On the margins, the labor market is, nevertheless, cooling. According to a survey released on Thursday by the international outplacement company Challenger, Gray & Christmas, the number of job reductions declared by American firms dropped by 24% to 77,770 in February. Yet, planned layoffs increased by 410% over the same time last year. Moreover, February's total was the highest since 2009.
The IT sector saw the majority of job cuts, with 28% of layoffs reported last month. Retailers and financial institutions are also laying off employees.
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