Last week applications for US unemployment benefits rose to their highest level since December, driven by spikes in California and New York and suggesting some softening in a still tight labor market.
Initial unemployment claims rose by 21,000 to 211,000 in the week ending March 4, Labor Department data showed on Thursday. This figure exceeded the forecasts of all economists. The average estimate was for 195,000 applications.
Continued claims, which include people who have received unemployment benefits for a week or more and are a good indicator of how hard it is for people to find work after losing a job, rose 1.72 from 69,000 in the week ended February 25. million, the biggest jump since November 2021.
The labor market remains strong despite a jump in claims. Private payrolls and jobs opening reports released this week showed strong hiring and demand for workers.
Federal Reserve Chairman Jerome Powell testified before Congress this week that the central bank could hike interest rates at a faster pace if economic data continues to strengthen, although policymakers have yet to make a decision at their upcoming policy meeting. Have not taken
Much of this will depend on Friday’s government jobs report, which economists believe could tilt the balance in favor of a larger interest rate hike. Projections call for 225,000 payrolls in February and the unemployment rate at a five-decade low.
Claims data can be choppy from week to week and especially around holidays, and the figures peaked as Presidents Day approached. The four-week moving average of initial claims, which smooths out some volatility, rose to 197,000, the most since January.
On an unadjusted basis, claims rose by more than 35,000 to 237,513. California and New York accounted for three quarters of the increase.
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