US reported a rise in weekly jobless claims. Why’s that?
In the US, the number of citizens filing jobless claims to get unemployment benefits increased over the last week. Data showed that the rise was moderate, though. Thus far, tightening credit conditions hasn’t influenced the US economy significantly. The latter remains strong while the labour market is still tight. Some analysts fear that if the Federal Reserve continues its aggressive hawkish policy, the economy might go into recession, though. The collapse of two US regional banks also worried the strategists. Banking problems might spread worldwide, creating a domino effect. The major central banks are trying to avoid such development, though.
On Thursday, the Labor Department announced that initial claims for state unemployment benefits surged forward by 7,000 new ones. Overall, they hit 198,000 over this season. However, analysts had forecast 196,000 claims for the last week of March. Thus, this report is higher than the markets expected.
What’s happening in the technology industry?
The technology industry was an exception among the others, as very few numbers of claims came from that direction. Even though that industry faced several high-profile layoffs, the overall report wasn’t so bad. Experts think that the low level of claims might be connected to various factors caused by seasonal adjustments.
Daniel Silver, the economist at JPMorgan, noted that alternative seasonal adjustment measures might influence the markets, resulting in less upbeat figures as of late. However, they do not explain particularly weak results. It’s also possible that momentum is softening, though.
The Labor Department also announced that it would release seasonal adjustment factors in April. Job opening numbers increased in January, and most employers have tried to avoid letting go of workers. Besides, even laid-off employees had stronger chances of finding new jobs. But that changed after the collapse of US banks. The governed had to tighten lending standards. As a result, households and small businesses have a harder time getting credit, which can weaken the labour demand.