Labor Dept.: Slightly more workers apply for unemployment last week
Updated as of Friday, November 11, 2022 1:28 PM
WASHINGTON – The number of Americans applying for jobless benefits rose slightly last week, but the labor market remains healthy despite job cuts that have begun to spread across industries most affected by soaring interest rates, such as housing and technology.
Unemployment claims for the week ending Nov. 5 rose by 7,000 to 225,000 from 218,000 the previous week, the Labor Department reported Thursday. The four-week moving average declined by 250 to 218,750.
Applications for jobless claims, which generally track layoffs, have remained historically low this year, even as the Federal Reserve has cranked up its benchmark borrowing rate six times in its effort to cool the economy and tame inflation.
A strong job market is deepening the challenges the Federal Reserve faces as it raises interest rates at the fastest pace since the 1980s to try to bring inflation down from near a 40-year high. Steady hiring, solid pay growth and low unemployment have been good for workers, but have contributed to rising prices.
The government reported Thursday consumer inflation reached 7.7% in October.
That marked the smallest year-over-year gain since January. Excluding volatile food and energy prices, “core” inflation rose 6.3% in the past 12 months and 0.3% from September.
Those number are still high, but came in lower than economists expected, giving a sliver of hope that the Fed will ease up on future rate hikes.
Last week, the Fed raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years.
Fed officials have admitted that part of their strategy is to loosen up the U.S. job market, which has been adding jobs at a furious pace the past two years after COVID-19 hit the U.S. and wiped out more than 20 million jobs.
The Labor Department reported last week that American employers added a healthy 261,000 jobs in October and that the unemployment rate rose from a five-decade low of 3.5% to 3.7%. Fed officials have signaled that the unemployment rate needs to be at least 4% to slow inflation, a threshold that could be met soon as more and more high-profile companies announce layoffs.
Facebook parent Meta said this week it was laying off 11,000 people, about 13% of its workforce, amid slumping revenue and broader tech industry woes. Twitter laid off about half of its 7,500-person staff after Elon Musk took over the company last week. The online real estate broker Redfin announced that it was laying off another 862 employees on Wednesday — after slashing 470 jobs in June — with the housing market in an eight-months-long slump. Redfin has shrunk its workforce by more than 25% since April and rival online broker Compass has also laid off hundreds of workers this year.
The Labor Department reported Thursday that total number of Americans collecting unemployment aid rose by 6,000 to 1.49 million for the week ending Oct. 29, a seven-month high, but still not a troubling level.