Americans applying for unemployment benefits rose higher than expected last week but remained at healthy levels.
The U.S. Department of Labor reported Thursday that jobless claims increased by 6,000 to 225,000 for the week ending September 28, slightly higher than the 221,000 analysts expected. Jobless claims have increased from this time last year by 9,000 from 216,000.
Applications for unemployment benefits are widely considered to reflect job layoffs in a given week.
Jobless claims fluctuated modestly in September. The four-week average of claims was 224,250, with claims reaching a four-month low of 218,000 in the week ending September 21. Meanwhile, the number of Americans collecting jobless benefits for the week ending September 21 was down by 1,000 to about 1.83 million.
Jobless claims averaged 213,000 a week in the first four months of the year before they started to increase in May. The rising of claims, along with other labor market data, suggests that high interest rates may finally be hurting the market.
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The Federal Reserve raised its benchmark rate, known as the federal funds rate, 11 times in 2022 and 2023 to curb high inflation, which hit both the United States and countries around the world after the COVID-19 pandemic.
Last month, the Fed Reserve cut interest rates for the first time in over four years. The interest rate, which was at a 23-year high, came down by a large half-percentage point to between 4.75 to 5 percent.
The federal funds rate is the target interest rate at which commercial banks borrow and lend their extra reserves to one another overnight. The cost of consumer borrowing, including mortgages, auto loans and credit cards, should go down over time with a series of Fed cuts.
Meanwhile, American employers added a modest 142,000 jobs in August, up from the dismal 89,000 jobs added in July. However, August’s numbers are pretty far down from the monthly average of nearly 218,000 jobs added in the first six months of the year. September’s jobs report is set to be released on Friday.
Additionally, some retailers like Amazon and Target have said that they are ramping up hiring for the holiday season, however, fewer seasonal workers are expected to be hired this year.
Amazon said on Thursday that it will hire 250,00 full, part-time and seasonal workers for the busy season ahead. Meanwhile, Target said in September that it will hire about 100,000 seasonal employees and offer current employees more work hours during the holiday season.
This article includes reporting from The Associated Press.
