The U.S. Labor Department reported on Thursday that new claims for unemployment benefits rose unexpectedly in the week ending May 31. Initial jobless claims increased by 8,000 to 247,000, reaching the highest level since early October 2024. This figure exceeded economists’ forecast of 235,000 claims and marked a rise from the previous week’s revised total of 239,000.
The four-week moving average of initial claims, which smooths out weekly fluctuations, also climbed to 235,000, up 4,500 from the prior week’s 230,500.
Meanwhile, continuing claims, which track ongoing unemployment benefits, slightly decreased by 3,000 to 1.904 million for the week ending May 24. However, the four-week average of continuing claims rose by 8,000 to 1.895 million, the highest since November 2021.
Experts caution that while jobless claims are rising, the increase is gradual. Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, noted that the slow pace of growth in claims is worth monitoring but does not yet signal a major problem.
The rise in claims may reflect growing uncertainty among businesses, partly due to tariff-related concerns affecting hiring decisions. The Federal Reserve’s Beige Book recently highlighted reduced labor demand and hiring freezes in several regions. Some sectors have reported layoffs, though these remain limited.
Investors and analysts are closely watching the upcoming May jobs report, scheduled for release on Friday. Economists expect the economy to add 130,000 jobs in May, down from 177,000 in April, with the unemployment rate holding steady at 4.2%. This report will provide a clearer picture of the labor market’s health and influence Federal Reserve policy decisions.
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