US Initial Unemployment Benefit Claims Rise, Reflecting Fourth Quarter Labor Market Slowdown

28 December 2023 - 205 views

The number of initial unemployment benefit claims in the US increased last week, signaling a cooling labor market in the fourth quarter. New state claims rose to 218,000, higher than the expected 210,000. The number of individuals receiving benefits after a week rose to 1.875 million. Despite slower job growth and lower inflation, the Federal Reserve has maintained its benchmark interest rate.

[Deflationary Scenario]
[Significance: Medium]

1. The number of Americans filing initial claims for unemployment benefits increased by 12,000 to 218,000 last week, indicating a cooling labor market in the fourth quarter.
2. Economists expected an increase to 210,000 initial claims for the week ended December 23, according to a Reuters poll.
3. The number of people receiving benefits after one week of aid rose by 14,000 to 1.875 million, suggesting difficulties in finding employment for those already out of work.
4. In November, the economy added 199,000 new jobs, up from 150,000 in October, and the unemployment rate fell from 3.9% to 3.7%.
5. The Federal Reserve is expected to end its interest rate hike campaign amid slower job growth and milder inflation. The Fed has raised its benchmark interest rate by 525 basis points since March 2022.