Jobless claims tick up to 225,000 as economy faces recession risk
by Zachary Halaschak, Economics Reporter |
November 10, 2022 08:33 AM
The number of new applications for unemployment benefits rose by 7,000 to 225,000 last week, a discouraging sign for the economy, the Labor Department reported Thursday.
Rising jobless claims, a proxy for layoffs, are a sign the unusually strong labor market might be starting to react to the Federal Reserve’s efforts to tighten monetary policy to slow economywide spending and bring down inflation.
For a lengthy stretch between early August and the middle of September, jobless claims defied expectations and remained low. Since the start of October, though, they have been above 210,000.
"Recent announcement of large layoffs by a growing number of tech companies will show up in higher unemployment claims over the next several months. A rise in weekly initial claims to over 250K will likely be the result, after we get past the temporary rise in holiday hiring, showing some cooling-off in the hot labor market in early 2023," said PNC senior economic adviser Stuart Hoffman.
The Fed has been aggressively jacking up interest rates to tame inflation. Driving up interest rates slows demand and could result in recessionary conditions. Earlier this month, the central bank conducted a huge rate hike to the tune of three-quarters of a percentage point, or 75 basis points. It was the fourth such increase in just five months — a historic pace of increases.
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https://www.washingtonexaminer.com/policy/economy/jobless-claim-tick-up-as-economy-faces-recession-risk
