The numbers: The number of Americans who applied for unemployment benefits last week rose by 5,000 to 245,000, pointing to a small erosion in the robust U.S. labor market.
New jobless claims increased from a revised 240,000 in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.
The number of people applying for unemployment benefits is one of the best barometers of whether the economy is getting better or worse.
New jobless claims are still very low, but they have risen from fewer than 200,000 in January in a sign the labor market has cooled slightly as higher interest rates dampen U.S. growth.
Key details: Thirty-five of the 53 U.S. states and territories that report jobless claims showed a decrease last week. Eighteen posted an increase.
Most of the increase in new jobless claims came in New York, where new filings typically rise during school breaks and fall immediately afterward.
Other states reported little change.
The number of people collecting unemployment benefits in the U.S. jumped by 61,000 to a total of 1.87 million in the week ending April 8. That’s the highest level since November 2021.
The gradual increase in these so-called continuing claims suggests it’s taking longer for people who lose their jobs to find new ones.
Big picture: Wall Street is watching jobless benefits closely because it’s one of the first indicators to start blinking red when the U.S. is headed toward recession.
New jobless claims have crept higher this year after touching a 54-year low, pointing to some cooling in a hot labor market. But the labor market is still quite strong.
The Federal Reserve wants the labor market to cool even further to temper a sharp increase in wages and help combat high inflation. A series of interest-rate increases by the central bank has slowed the economy and eventually should curb the appetite for workers.
Looking ahead: “With talk of deteriorating economic conditions and in the wake of the recent bank failures, businesses may turn more cautious in their hiring practices,” said senior economic adviser Stuart Hoffman of PNC Financial Services.
“Our view remains that layoffs will rise less dramatically than normally might occur as companies do all they can to avoid shedding workers who have been incredibly difficult to recruit and retain,” said chief economist Joshua Shapiro of MFR.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open lower Thursday.
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