WASHINGTON (Reuters) – The number of Americans filing new applications for unemployment benefits increased moderately last week, suggesting that the labor market continued to steadily cool.
Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 224,000 for the week ended Nov. 30, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims for the latest week.
Claims are at levels consistent with steady job growth, and have signaled a sharp rebound in nonfarm payrolls in November after the labor market was severely distorted by Hurricanes Helene and Milton as well as strikes by factory workers at Boeing and another aerospace company.
Nonfarm payrolls likely increased by 200,000 jobs in November after rising by 12,000 in October, the lowest number since December 2020, a Reuters survey showed.
The historically low layoffs account for most of the labor market’s strength. Hefty interest rate hikes from the Federal Reserve in 2022 and 2023 to tame inflation have left companies with little appetite to hire more workers.
The Fed’s Beige Book report on Wednesday described employment as “flat or up only slightly” across the U.S. central bank districts in November. It also noted “hiring activity was subdued as worker turnover remained low and few firms reported increasing their headcount,” adding “the level of layoffs was also reportedly low.”
Sluggish hiring is keeping many who have lost their jobs longer on unemployment rolls. The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 25,000 to a seasonally adjusted 1.871 million during the week ending Nov. 23, the claims report showed.
While the data has no bearing on November’s employment report as it falls outside the survey period, the persistent elevation in the so-called continuing claims poses an upside risk to the unemployment rate. The jobless rate is forecast rising to 4.2% last month from 4.1% in October.
The Fed is widely expected to cut rates this month for the third time since launching its easing cycle in September. The central bank’s policy rate is in the 4.50%-4.75% range, having been hiked by 525 basis points in 2022 and 2023.
The rate outlook for 2025 is uncertain amid threats of tariffs and tax cut promises from President-elect Donald Trump’s incoming administration, which economists have said would raise prices and increase government borrowing.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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