The number of people who applied for unemployment benefits last week increased by 5,000 to 213,000, but new jobless claims are still very low and reflect strong demand for labor even in a weaker U.S. economy.
The increase in new claims was the first in five weeks, but it was basically a statistical fluke. That is because unemployment filings from two weeks ago were revised down to 208,000 from a preliminary 213,000.
Economists polled by the Wall Street Journal had predicted new claims to total 214,000 in the seven days ended Sept. 17. The figures are seasonally adjusted. The number of people applying for unemployment benefits is one of the best indicators of whether the economy is getting better or worse. The Federal Reserve is attempting to extinguish the highest inflation in 40 years, and the economy is slowing down as the Fed jacks up interest rates. Part of the central bank's goal is to cool off a red-hot labor market in which wages are rising sharply and adding to inflation. If the Fed succeeds, hiring is expected to slow, layoffs would increase and the unemployment rate would increase from its current 3.7% rate. The jobless rate is predicted to rise to 4.4% by the end of 2023, according to the bank. 37 of the 53 states and U.S. territories that report jobless claims showed an increase and 16 reported a decline. Most of the changes were small. In the week ending Sept. 10, the number of people who are already receiving unemployment benefits fell by 22,000 to 1.38 million. These continuing claims are close to a 50 year low. The low level of claims is a reminder that labor market conditions are extremely tight, according to lead U.S. economist Nancy Van Houten, of Oxford Economics. Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were due to open higher in Thursday trades.