Unemployment claims in the U.S. saw an uptick in the last week of May, indicative of the tense labor market conditions amid mounting concerns about a potential recession exacerbated by escalating borrowing costs.
This comes amidst the Biden administration’s struggle with growing economic uncertainty.
As per the latest statistics, the weekly count of Americans registering for state unemployment support increased by 2,000, resulting in a seasonally adjusted total of 232,000 for the week concluding on May 27.
This rise was in line with the economic forecast by Reuters, which projected 235,000 claims for the week in review.
Despite the noticeable slowdown in job growth compared to the previous year’s momentum, the demand for labor continues to be sturdy.
The U.S. government revealed that as of the end of April, there were approximately 10.1 million job vacancies available.
The ratio of job openings to unemployed individuals stood at 1.8, significantly above the 1.0-1.2 range which would be indicative of a balanced labor market that doesn’t excessively spur inflation.
The most recent claims report revealed a 6,000 increase in individuals continuing to receive benefits after the initial week, bringing the total to 1.795 million for the week ending May 20.
This statistic serves as a rough estimate for hiring trends.
Economists anticipate the unemployment rate to experience a slight increase, moving to 3.5% from April’s 53-year record low of 3.4%.
The Federal Reserve’s Beige Book report released Wednesday corroborated the expectations of decelerating job growth.
The report noted that some “were pausing hiring or reducing headcounts due to weaker actual or prospective demand or to greater uncertainty about the economic outlook.”
Adding to the grim job market scenario, a recent report released by Challenger, Gray & Christmas, a global outplacement firm, revealed that U.S.-based employers announced 80,089 job cuts in May, a jump of 20% from the previous month.
The total number of layoffs announced this year has skyrocketed to 417,500, a 315% leap from the corresponding period in the previous year.
Discounting 2020, the inception year of the pandemic, this total marks the highest for the January-May period since 2009.
