Some 240,000 people applied for unemployment benefits last week, up by 17,000 from the week before, the Labor Department said in its weekly jobless claims report, which was released a day ahead of its typical schedule due to Thursday’s Thanksgiving Holiday.
Economists polled by US media had anticipated jobless claims to rise by just around 13,000 last week.
“It is quite a big jump in the claims data for the current week,” economist Greg Michalowski said in a post on the ForexLive forum. “It will be interesting to see if this is the trend rather than the exception.going forward, but the short term trend is to the upside since the last cycle low during the September 24 week.”
The four-week moving average of claims, which smooths out week-to-week volatility in unemployment data, rose by 5,500 to 226,750.
Joblessness among Americans reached an all-time high of 14.8% in April 2020, with the loss of some 20 million jobs after the COVID-19 breakout. Since then, the Labor Department’s non-farm payrolls report has reported hundreds of thousands of job additions every month. The national jobless rate has remained for almost a year now at below the 4% level that the Fed defines as maximum employment. US average hourly earnings have also risen without stop since June 2021.
The Fed has a particularly tough job in trying to balance jobs growth with inflation since ensuring maximum employment and inflation at below 2% a year are its twin targets.
Inflation, as measured by the Consumer Price Index, expanded by 7.7% during the year to October, growing at its slowest pace of in nine months after peaking with a 9.1% growth during the 12 months to June. The drop came after relentless interest rate hikes by the Fed, which has added 375 basis points to rates since March, from a starting point of just 25. Despite such an aggressive campaign, inflation remains more than three times higher than levels preferred by the central bank, which has vowed to get to its 2% target.
Runaway inflation had prompted the Fed to add 375 basis points to rates since March. Prior to that, rates peaked at just 25 basis points, as the central bank slashed them to nearly zero after the global COVID-19 outbreak in 2020.
After four straight jumbo-sized hikes of 75 basis points between June and November, markets expect the Fed to impose a smaller increase of 50 basis points at its upcoming rate decision on December 14.