The number of initial US applications for unemployment benefits has recently increased significantly
The number of initial U.S. jobless claims has risen sharply recently, suggesting a cooling job market. Last week, 249,000 citizens filed for state unemployment benefits, the highest level since August 2023, the U.S. Labor Department reported on Thursday. Economists polled by Reuters had expected 236,000 claims, following 235,000 the previous week. The less volatile four-week moving average rose to 238,000.
Experts consider a figure of around 270,000 initial claims as critical, signaling a negative turn in the labor market. The U.S. Federal Reserve aims to tame inflation with its tight monetary policy, also cooling the labor market. The central bank currently maintains its key interest rate in the range of 5.25 percent to 5.50 percent. However, it has recently opened the door to a potential cut, which is expected by financial markets in September. According to Fed Chair Jerome Powell, there are signs that the labor market is normalizing as desired. A series of data suggests that the job market remains strong but not overheated.
The high level of unemployment claims from last week, which was the highest since August 2023, indicates a potential shift in the employment trend. The experts are closely watching the upcoming figures to see if the initial claims will surpass the critical level of around 270,000, suggesting a more pronounced cooling in the labor market.
