WASHINGTON (AP) — The number of Americans filing for jobless benefits rose slightly last week as the Federal Reserve made big efforts to cool the economy and rein in inflation.
Jobless claims for the week ending Sept. 17 rose by 5,000 to 213,000, the Labor Department reported Thursday. Last week’s number was revised down by 5,000 to 208,000, the lowest figure since May.
The first requests generally reflect layoffs.
The four-week average for claims, which evens out some of the weekly volatility, fell 6,000 to 216,750.
On Wednesday, the Federal Reserve raised its benchmark short-term borrowing rate an additional three-quarters of a point with the aim of reducing persistent inflation, which has been high for decades. Although gasoline prices have fallen steadily since the summer, prices for food and other basic necessities remain high enough that the Fed has indicated that it will continue to raise its benchmark interest rate until prices return to normal levels.
Fed officials pointed to the remarkable resilience of the US labor market as further justification for raising rates five times this year, including three consecutive 75 basis point hikes.
The Fed’s decision raised its benchmark short-term rate, which affects many consumer and business loans, to a range of 3% to 3.25%, the highest level since the start of 2008. Officials also forecast that they will raise their benchmark rate further to around 4.4% by the end of the year, one point higher than they had envisaged last June.
Fed Chairman Jerome Powell said that before Fed officials consider halting their rate hikes, they want to be confident that inflation is receding toward their 2% target. He noted that the strength of the labor market is fueling wage gains that are helping to drive up inflation.
He emphasized his belief that controlling inflation is vital to ensure the long-term health of the labor market.
“If we want to pave the way for another period of very strong labor markets,” Powell said, “we have to put inflation behind us. I wish there was a painless way to do that. ‘there is not any.
For now, companies are still desperately looking for workers, posting more than 11 million job openings in July, meaning there are almost two vacancies for every unemployed American.
Earlier this month, the Labor Department reported that employers added a still-strong 315,000 jobs in August, though less than the average of 487,000 per month over the past year. The unemployment rate jumped to 3.7%, largely because hundreds of thousands of people returned to the labor market. Some did not find work right away, so the number of government unemployed increased.
The U.S. economy has been mixed this year, with declining economic growth in the first half of 2022. Investors and economists fear the Fed’s aggressive rate hikes will force businesses to cut jobs and tip the economy. economy in a recession.
Online property companies RedFin and Compass recently announced job cuts as rising interest rates cooled the housing market. The National Association of Realtors reported Wednesday that existing home sales fell again in Augustthe seventh consecutive monthly decline.
Other high-profile layoffs announced in recent months include The Gap, Tesla, Netflix, Carvana and Coinbase.
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