Applications for U.S. unemployment insurance rose more than expected last week, though remained historically low, in the latest sign that labor demand may be beginning to moderate.
Initial unemployment claims increased by 29,000 to 219,000 in the week ended Oct. 1, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 204,000 new applications.
Continuing claims for state benefits edged up to 1.36 million in the week ended Sept. 24.
The pickup in claims – if sustained – would suggest lackluster spending in various sectors and uncertainty about the economy’s prospects are prompting some businesses to lay off workers. That said, the level of applications remains low and continues to signal a robust labor market.
Data out earlier this week showed job openings plummeted in August by the most since early in the pandemic, indicating some softening in labor market conditions. Layoffs remain limited, but a growing number of firms in recent weeks including Robinhood Markets, Microsoft, Tesla, Netflix and Ford have announced dismissals or plans to cut jobs.
The claims data precede Friday’s monthly jobs report, which is forecast to show employers added another 260,000 payrolls in September. While that would be the fewest jobs added in a month since a decline in late 2020, it’s still a robust advance and indicative of a strong labor market. The unemployment rate is seen holding near a five-decade low, and average hourly earnings are set for another solid advance.
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