U.S. weekly jobless claims hit a 10-month high last week, signaling a potential easing in the labor market. The Labor Department announced on Thursday that initial claims for state unemployment benefits rose by 13,000 to a seasonally adjusted 242,000 for the week ending June 8, marking the highest level since last August. This rise exceeded the 225,000 claims predicted by Reuters-polled economists.
The labor market is showing signs of slowing as the Federal Reserve’s significant interest rate hikes, totaling 525 basis points since 2022, begin to affect the broader economy. The unemployment rate climbed to 4% in May, the highest since January 2022, and economic growth slowed notably in the first quarter.
The Federal Reserve maintained its benchmark interest rate at 5.25%-5.50% on Wednesday, a range held since July of the previous year. Fed officials indicated that the initial rate cut might be delayed until December, projecting only a single quarter-percentage-point reduction for 2024.
Fed Chair Jerome Powell noted, “A wide array of indicators shows that labor market conditions have reverted to their pre-pandemic state—tight, yet not excessively so.”
The report also highlighted an increase of 30,000 in the number of individuals receiving benefits after their initial claim, bringing the seasonally adjusted total to 1.820 million for the week ending June 1, serving as an indicator of sustained hiring activity.
Click here to access the official report from the U.S. Department of Labor
