US Weekly Jobless Claims Highest in More than Eight Months as Labour Market Eases

• The number of Americans filing new claims for unemployment benefits rose last week to the highest level in more than eight months, offering more evidence that the labour market was steadily cooling.
• "The labour market shows some signs of rebalancing with fewer job openings posted around the country, and now company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year," said Christopher Rupkey, chief economist at FWDBONDS.
• Initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 231,000 for the week ended May 4, the highest level since the end of last August. The increase was the largest in nearly four months. Economists polled by Reuters had forecast 215,000 claims in the latest week. Claims broke above the 194,000-225,000 range, which had prevailed since the start of the year.
• Sentiment surveys, including the Institute for Supply Management and the NFIB, have been flagging a sharp slowdown in the labor market. Companies, however, appear to be cutting back on hiring, while largely holding on to their workers after struggling to find labour during and after the COVID-19 pandemic.
• The labour market is steadily rebalancing in the wake of 525 basis points worth of interest rate hikes from the U.S. central bank since March 2022 to dampen demand in the overall economy.
• The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 17,000 to a seasonally adjusted 1.785 million during the week ending April 27, the claims report showed. "This still very low level of continuing claims is further evidence that the big jump in initial claims in early May is not the start of a persistent rise in laid-off workers but bears close watching," said Stuart Hoffman, senior economic advisor at PNC Financial.

(Source: Reuters)