- Weekly jobless claims rose by 13,000 to 231,000
- Continuing claims increased by 32,000 to 1.865 million
- Import prices fell 0.8% in October
WASHINGTON, Nov 16 (Reuters) – The number of Americans filing new claims for unemployment benefits reached a three-month high last week, showing labor market conditions are continuing to improve, prompting the Federal Reserve. Can help in the fight against inflation.
The Labor Department’s weekly unemployment claims report on Thursday, the most timely data on the health of the economy, also showed unemployment levels rising to levels not seen two years ago. The labor market is cooling as higher interest rates curb demand, which is consistent with slower economic activity.
This week’s data showed a decline in inflation and a softening in consumer spending, boosting expectations that the Fed’s monetary policy tightening cycle is complete.
“The Fed is certainly encouraged by the recent inflation data, but needs to see further deceleration in the labor market and wage growth to get inflation back on a stable path to 2%,” said Nancy Vanden Houten, chief U.S. economist at Oxford. ” Economics in New York.
Initial claims for state unemployment benefits rose by 13,000 to a seasonally adjusted 231,000 for the week ending Nov. 11, the most since August. Economists polled by Reuters had expected 220,000 claims for the latest week.
Unadjusted claims rose 1,713 last week to 215,874. Filings jumped in Massachusetts and New York, more than offset by notable declines in Oregon and Georgia.
The increase in claims is in line with a recent slowdown in hiring. Job growth slowed in October and the unemployment rate rose to 3.9%, the highest level since January 2022. Conditions remain quite tight, with 1.5 job openings for every unemployed person in September.
Economists at Goldman Sachs said they do not believe the rise in the unemployment rate last month was a bad sign, noting that the rise in the unemployment rate since April has come entirely from expansion rather than a decline in the size of the labor force. . employment.
The dollar fell against a basket of currencies. US Treasury prices rose.
Financial markets are also expecting an interest rate cut next May, according to CME Group’s FedWatch tool. Starting March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The number of unemployed is increasing
The claims report showed that the number of people receiving benefits after the initial week of aid rose by 32,000 to 1.865 million during the week ending November 4, the highest level since November 2021. So-called continuing claims have increased since mid-September.
Most economists attribute the difficulties in adjusting the data to seasonal fluctuations rather than physical changes in the labor market. He hopes the problem will be resolved when the government revises the data next spring.
“This is no reason to expect a materially higher unemployment rate in the November monthly jobs report,” said Lou Crandall, chief economist at Wrightson ICAP in New York.
While some agreed that seasonal adjustment was an issue, they also saw the continued increase as a sign that more unemployed people were experiencing longer periods of unemployment.
The inflation outlook was boosted by a separate report from the Labor Department’s Bureau of Labor Statistics on Thursday that showed import prices fell by the most in seven months in October amid a broad decline in the cost of goods.
Import prices fell 0.8% last month after rising 0.4% in September. Economists had forecast that import prices, which do not include tariffs, would fall by 0.3%. In the 12 months to October, import prices fell 2.0% after falling 1.5% in September. Annual import prices have now fallen for nine consecutive months.
Imported fuel prices fell 6.3%, reversing September’s gains. The cost of imported food fell 0.6% after falling 0.4% in September. Excluding fuel and food, import prices fell 0.2%, after falling 0.1% in September. These so-called core import prices declined 1.3% year-on-year in September.
The dollar has strengthened against the currencies of the United States’ main trading partners this year, helping to ease imported inflation pressures.
Prices of imported capital goods fell 0.2% after remaining unchanged the previous month. But the cost of motor vehicles, parts and engines rose 0.3% after rising 0.1% in September.
Consumer goods excluding automotive fell 0.1% after being unchanged in September. Higher borrowing costs are dampening domestic demand.
Prices of imported goods from China were unchanged after falling 0.1% in September. They fell 2.8% year-on-year in October, the biggest decline since October 2009.
The report also showed export prices declined 1.1% in October as prices of both agricultural and non-agricultural exports declined. Export prices rose 0.5% in September. They declined 4.9% year-on-year in October after falling 4.3% in September.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
Our Standards: The Thomson Reuters Trust Principles.
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