One sign was the October employment report that showed the creation of just 150,000 new jobs — and fewer than 100,000 in the private sector. The unemployment rate also edged up to a 21-month high of 3.9%.
“The upturn in continued claims suggests that … unemployed individuals are finding it more difficult to find new jobs, which would be consistent with a slower pace of hiring,” said lead U.S. economist Nancy Vanden Houten of Oxford Economics. The raw or actual number of people getting benefits is significantly lower and most of the increase has only taken place in the last month and a half.Take the exhaustion rate, which measures the percentage of people who use up all their jobless benefits. It’s risen to 35% from just under 30% at the end of 2022.
The Federal Reserve wants to see a further softening of the labor market to help reduce the upward pressure on wages that are contributing to high U.S. inflation. Many senior Fed officials say they are seeing signs of exactly that.