Thursday, October 6, 2022

U.S. Jobless Claims Tick Up to 213,000 But Are Still Trending Lower By


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By Geoffrey Smith — The tightness in the U.S. labor market showed little sign of easing on Thursday, as the number of people claiming for jobless benefits continued to trend down despite a modest uptick.

The Labor Department said that 213,000 people filed last week, up slightly from 208,000 the week before, but below analysts’ consensus forecast of 218,000.

The previous week’s figures were revised down by 5,000. As such, the for initial jobless claims, which smoothes out some of the weekly volatility in the series, continued to decline, hitting a three-month low of 216,750.

The number of also continued to decline, by some 22,000, to 1.379 million.

The data continue to suggest that despite a slowdown that is causing layoffs to increase, it’s still relatively simple for those who lose one job to find another almost immediately. 

“The low level of claims is a reminder that labor market conditions remain extremely tight,” said Nancy Vanden Houten, an analyst with Oxford Economics, in a note to clients. “The imbalance between the supply and demand for workers is key factor behind the Fed’s plans to continue aggressively raising interest rates.”

The Federal Reserve for fed funds by another 75 basis points on Wednesday, to 3%-3.25%, a level that Chairman Jerome Powell said was only at the lower end of what could be considered restrictive for the economy. The Fed’s new ‘dot-plot’ foresees rates rising by more than another percentage point before plateauing next year. 

Anecdotal reports suggest that layoffs are, however, picking up across the economy while the pace of hiring is slowing. The Wall Street Journal reported on Wednesday that Meta Platforms (NASDAQ:), the owner of Facebook, is quietly culling its workforce to cut its operating costs by 10%, while retail giant Walmart (NYSE:) – which hired over 150,000 employees to deal with last year’s holiday period – said it only intends to hire 40,000 this year.

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