The number of new applications for unemployment benefits was at 228,000 last week, much higher than recently reported numbers. Rising jobless claims are a proxy for layoffs, and so higher numbers suggest the labor market is weakening.
Rising jobless claims are a proxy for layoffs, and so higher numbers suggest the labor market is weakening.Recent weeks' reports had shown claims running below 200,000, indicating layoffs were rare. But the Labor Department unveiled a new methodology for calculating claims Thursday that showed they are running significantly higher.
"We expect a softening in demand for workers as economic activity slows on the effects of restrictive monetary policy," wrote Rubeela Farooqi, chief U.S. economist for High Frequency Economics."As well, a further tightening in credit conditions which weighs on lending activity is likely to affect business decisions about hiring."
This week saw some signs that the labor market is finally beginning to soften in response to the barrage of rate revisions, the most recent of which being a quarter of a percentage point increase in the Fed's target rate last month. In foreshadowing before Friday’s employment report, ADP announced Wednesday that private-sector hiring decelerated last month. Payrolls rose by only 145,000 for the month, down from 261,000 in February. That number was well below expectations.
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