1 of 2 | The number of first-time claims of unemployment hit a level not seen since October 2021, the Labor Department reported. The cool down could be welcome news for the Federal Reserve. File photo by Alexis C. Glenn/UPI | License Photo
June 8 (UPI) -- The number of people filing initial claims for unemployment insurance reached its highest level since October 2021 during the week ending June 3, the Labor Department reported Thursday.
First-time claims came in at 261,000 for the week, an increase of 28,000 from the prior seven-day period. The less-volatile, four-week moving average showed an increase of 7,500 from the prior week to reach 237,250, data show.
Hiring is a concern for a Federal Reserve trying to cool the economy with successive interest rate hikes. More jobs mean more discretionary spending, driving both demand and inflation higher.
Weekly data and the four-week trend followed a downturn in unemployment in May. Last month, the number of people who were without a job for less than five weeks increased by 217,000 to 2.1 million, offsetting a decline from April.
The number of people without a job for between 15 and 26 weeks, meanwhile, increased by 179,000 to 858,000, while those off payrolls for longer than that remained static in May.
The Fed meets next week to consider its next step in the fight against consumer-level inflation. The Federal Open Market Committee also releases its latest forecast on the economy.
The Fed could be inspired to stand still given that employment is starting to weaken. But a surprise rate hike from the Bank of Canada on Wednesday could be a sign of things to come for the U.S. central bank.
Demand levels were considered more persistent than anticipated, the Bank of Canada said.
Gross domestic product growth in the U.S. economy is expected at 1.6% this year, the Organization for Economic Cooperation and Development said Thursday. Risks are skewed toward the downside globally, due in large part to the uncertainty stemming from the war in Ukraine.