The latest jobless claims indicate that the US job market is tight amid rising interest rates, as claims increased by 7,000.
According According to the Department of Labor, weekly US jobless claims rose to 198,000, an increase of 7,000. Although the new number is slightly higher than the 195,000 expected, it is still low overall in a tight job market.
The Department of Labor also reported a four-week moving average of weekly claims that totaled 198,250. This figure revealed an increase of 2,000 from the previous week’s unrevised average of 196,250.
Still reporting seasonally adjusted data, the US Department of Labor added:
“The seasonally adjusted insured unemployment rate was 1.2% for the week ending March 18, unchanged from the prior week’s unrevised rate. The anticipated seasonally adjusted unemployment rate for the week ending March 18 was 1,689,000, an increase of 4,000 from the previous week’s revised level. The previous week’s level was revised down by 9,000 from 1,694,000 to 1,685,000”.
Under Unadjusted Data, the Federal Reserve said:
“The anticipated number of actual initial claims under state programs, unadjusted, totaled 223,913 in the week ending March 25, an increase of 10,906 (or 5.1%) over the prior week. Seasonal factors expected an increase of 3,051 (or 1.4%) from the previous week. There were 196,811 initial claims in the comparable week in 2022.”
The unemployed claim to be below 200,000 since mid-January
The country’s jobless claims have been below 200,000 since mid-January. Additionally, data for the week ending March 25 reflected a hesitancy among companies to lay off employees. This hesitation of reduction seems peculiar because the unemployment rate could increase throughout the year.
Jobless claims were also relatively light despite continued aggressive efforts by the Federal Reserve to control inflation by raising interest rates. In addition, the main bank in the US looks for a labor market characterized by a strong imbalance between supply and demand. Ideally, the Fed views its sharp imbalance as introducing roughly two jobs for every available worker.
Amid the development of jobless claims, continuing claims rose 4,000 to 1,689 million. This figure was lower than the consensus estimates of 1.6935 million for the same period.
Gross domestic product (GDP) reportedly grew at an annualized rate of 2.6% in the fourth quarter of 2022. However, this increase was slightly lower than the previous estimate of 2.7% due to revisions to declining exports and consumer spending.
The first quarter of 2023 has turned out differently, with the Atlanta Fed’s GDPNow tracker estimating that GDP rose at a rate of 3.2%.
Last week Bloomberg reported an unexpected decline in jobless claims for a second week, underscoring employers’ reluctance to cut staff. The report indicated that initial claims for unemployment benefits fell by 1,000 to 191,000 in the week ending March 18.
The full extent of the impact of the recent bank failures on the US labor market remains unclear. However, tighter credit standards and higher borrowing costs could restrain the economy.
banking sadness
Three US banks, including Silicon Valley Bank (SVB), collapsed earlier this month after suffering a run on their banks. This development sent the banking sector into a tailspin and threatened to impact other financial institutions at risk.
On March 27, First Citizens Bank acquired all of SVB’s customer loans and deposits from the Federal Deposit Insurance Corporation (FDIC). First Citizens also reopened all SVB branches as First Citizens Bank and Trust Company.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
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