WASHINGTON: The number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labor remains tight despite aggressive interest rate increases from the Federal Reserve to cool demand.
Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 213,000 for the week ended Sept 17, the Labor Department said on Thursday. Data for the prior week was revised to show 5,000 fewer applications filed than previously reported. Economists polled by Reuters had forecast 218,000 applications for the latest week.
The US central bank delivered a 75 basis points rate hike on Wednesday, its third straight increase of that magnitude, and signaled more large increases to come this year. Fed Chair Jerome Powell told reporters that “there’s only modest evidence that the labor market is cooling off,” describing it as continuing “to be out of balance.”
Since March, the Fed has raised its policy rate by three percentage points to its current range of 3.0% to 3.25%.
Economists say companies are hoarding workers after experiencing difficulties hiring in the past year as the COVID-19 pandemic forced some people out of the workforce in part because of prolonged illness caused by the virus.
There were 11.2 million job openings at the end of July, with two jobs for every unemployed person.
The claims report covered the period during which the government surveyed businesses for the nonfarm payrolls portion of September’s employment report.
Applications fell between the August and September survey periods. Payrolls increased by 315,000 jobs in August. Employment is now 240,000 jobs above its pre-pandemic level.
The number of people receiving benefits after an initial week of aid decreased 22,000 to 1.379 million in the week ending Sept. 10. Data next week on the so-called continuing claims, a proxy for hiring, will shed more light on September’s job growth picture.