Slightly more Americans applied for unemployment benefits last week

WASHINGTON (AP) — The number of Americans filing for unemployment benefits increased slightly last week, but the job market remains healthy despite job cuts that have begun to spread to industries hardest hit by the surge. interest rates, such as housing and technology.

Unemployment claims for the week ending Nov. 5 rose by 7,000 to 225,000 from 218,000 the previous week, the Labor Department reported Thursday. The four-week moving average declined from 250 to 218,750.

Jobless claims, which typically follow layoffs, have remained historically low this year, even as the Federal Reserve raised its benchmark borrowing rate six times in its effort to calm the economy and rein in the slowdown. ‘inflation.

A strong labor market is compounding the challenges the Federal Reserve faces as it raises interest rates at the fastest rate since the 1980s in an attempt to bring inflation down from a nearly 40-year high . Steady hiring, solid wage growth and low unemployment have benefited workers, but have contributed to higher prices.

The government announced on Thursday that consumer inflation hit 7.7% in October from a year earlier, the weakest year-on-year gain since January. Excluding volatile food and energy prices, “core” inflation has risen 6.3% over the past 12 months and 0.3% since September.

These numbers are still high, but are below economists’ expectations, giving some hope that the Fed will ease future rate hikes.

Last week, the Fed raised its short-term lending rate an additional 0.75 percentage points, three times its usual margin, for the fourth time this year. Its key rate is now in a range of 3.75% to 4%, the highest for 15 years.

Fed officials have admitted that part of their strategy is to ease the US labor market, which has been creating jobs at a breakneck pace over the past two years after COVID-19 hit the United States. and wiped out more than 20 million jobs.

The Labor Department reported last week that US employers added 261,000 jobs in October and the unemployment rate rose from a five-decade low of 3.5% to 3.7%. Fed officials have signaled that the unemployment rate needs to be at least 4% to slow inflation, a threshold that could be reached as more top companies announce layoffs.

Facebook’s parent company Meta said this week it was laying off 11,000 people, or about 13% of its workforce, amid falling revenue and broader issues in the tech sector. Twitter laid off about half of its 7,500 employees after Elon Musk took over the company last week. Online property broker Redfin said on Wednesday it was laying off a further 862 staff – after cutting 470 jobs in June – with the housing market in an eight-month slump. Redfin has cut its workforce by more than 25% since April and rival online brokerage Compass has also laid off hundreds of workers this year.

The Labor Department reported on Thursday that the total number of Americans collecting unemployment benefits rose by 6,000 to 1.49 million for the week ending Oct. 29, a seven-month high, but still not a level. disturbing.

Christy J. Olson