Us Weekly Jobless Claims Reaches Highest Level

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Us Weekly Jobless Claims Reaches Highest Level

US Weekly Jobless Claims Reached 264,000, Highest Level Since 2021

The recent data for the US weekly jobless claims indicates that a record number of Americans have applied to claim jobless benefits. In fact, such a huge jump was only last seen in 2021 & indicates the pressure in the labor market.

According to experts, the last week's jobless claims indicate that the effect of higher interest rates has started to show in the labor market.

Initial Claims Jumped To 22,000

Overall, the initial claims increased by 22,000, which took the seasonally adjusted number to 264,000. According to the Labor Department's data, this is the highest reading which was last seen in October 2021.

According to economists, the forecast for jobless claims was only 245,000, but the actual number turned out to be way higher.

The major reason for this increase in jobless claims is the job cuts in the tech sector that occurred at the end of 2022. Similarly, other industries, such as housing, were also affected severely due to the high-interest rates in the country.

For the most part, it appears the lagging effect of interest rates in the USA has started to show its effect on the labor market. After all, it appeared very unnatural to have slow GDP, high-interest rates, and a strong labor market!

After all, a strong labor market and high-interest rates usually don't go well together, as the interest rates affect the gross domestic product.

For now, the labor market still remains tight as there are 1.6 new jobs for 1 unemployment person in the country. But we can't ignore the fact that interest rates have started to catch up with the labor market as well.

We believe that it is still too soon to say this reading will have a major effect on the Fed's policy. But if we get similar readings from the upcoming NFP report, that would be a different story altogether.

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