Unemployment claims unexpectedly grew last week, which may indicate that demand for workers may be slowing as inflation rises.
However, the Department of Labor report shows that the labor market is still tight and people on jobless rolls have hit their lowest point since 1969.
Labor shortages may also help alleviate layoffs, which have started to gain traction in light of disappointing revenue figures from some of the largest companies in the country.
“Recent layoff announcements merit watching for a shift in business hiring decisions,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “For now, demand for labor still appears to be strong and, combined with lagging supply, should limit the number of layoffs.”
State unemployment claims grew by 21,000 during the week ending May 14, which is the highest level seen since the beginning of 2022. Kentucky saw claims jump to 6,728, while California saw an increase of 3,315 claims.
Altogether, the total number of unemployment claims came to 218,000, higher than the 200,000 forecasted by economists polled by Reuters.
Still, claims are below the all-time high of 6.137 million seen in April 2020 during the early days of the pandemic.
Even more, payrolls grew by 428,000 in April, marking the 12th consecutive month of increased employment over 400,000.