US weekly jobless claims increase slightly
WASHINGTON (Reuters) — The number of Americans filing new claims for unemployment benefits increased less than expected last week as the labor market continues to gradually slow amid cooling demand.
Initial claims for state unemployment benefits rose 1,000 to a seasonally adjusted 220,000 for the week ended Dec. 2, the Labor Department said on Thursday. Economists polled by Reuters had forecast 222,000 claims for the latest week.
Claims data are volatile around this time of the year because of holidays, making it harder to get a clear signal on the labor market.
Nonetheless, the labor market is slowing, with the government reporting this week that there were 1.34 job openings for every unemployed person in October, the lowest since August 2021. Demand for labor is cooling in tandem with the economy, curbed by higher interest rates.
A separate report from global outplacement firm Challenger, Gray & Christmas on Thursday showed U.S.-based employers announced 45,510 job cuts in November, up 24% from October. But planned layoffs dropped 41% compared to a year ago.
Loosening labor market conditions together with subsiding inflation have led financial markets to conclude that the Federal Reserve is likely done hiking rates in the current cycle. Financial markets are anticipating a rate cut as early as the first quarter, according to CME Group's (NASDAQ:CME) FedWatch Tool.
The U.S. central bank is expected to leave rates unchanged next Wednesday. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, dropped 64,000 to 1.861 million during the week ending Nov. 25, the claims report showed.
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