The number of Americans filing new claims for unemployment benefits rose moderately last week, pointing to a still-tight and strong labour market despite growing fears of a recession.
Claims tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring. They shot up to a three-month high a week before the Thanksgiving holiday, only to almost unwind the surge in the following week. The government reported last week that nonfarm payrolls increased by 263,000 jobs in November. Economists say technology firms are rightsizing after over-hiring during the COVID-19 pandemic, noting that small firms remain desperate for workers.
The Federal Reserve wants to slow the labour market to cool inflation. The U.S. central bank has raised its policy rate by 375 basis points this year from near zero to a 3.75 per cent-4.00 per cent range in the fastest rate-hiking cycle since the 1980s.