Jobless claims rise as labor market starts to cool
by Zachary Halaschak, Economics Reporter |
April 20, 2023 08:31 AM
The number of new applications for unemployment benefits rose by 5,000 to 245,000 last week, the Labor Department reported Thursday.
Rising jobless claims, a proxy for layoffs, are a sign the unusually strong labor market is finally starting to react to the Federal Reserve’s efforts to tighten monetary policy to slow economywide spending and bring down inflation. Claims have been trending upward in recent weeks.
The weekly jobless claims number has been closely watched over the past year, given the Fed has been hiking aggressively.
"Initial claims stayed on their upward trajectory, indicating labor market tightness is easing modestly, but layoffs are far from broad-based and have not caused a spike in the unemployed," economists with Oxford Economics wrote in a note on the release. "We expect a swifter rise in claims will wait until the second half of the year when the economy enters a recession, though the labor market downturn will be less severe by historic standards."
Despite the job market’s rip-roaring strength for months, even as the Fed tightened, there are now some signals the labor market is 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 federal funds rate last month.
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https://www.washingtonexaminer.com/policy/economy/jobless-claims-rise-as-labor-market-starts-to-cool
