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Wednesday, November 30, 2022

US labor market remains tight as weekly jobless claims drop

Fewer Americans applied for jobless benefits last week as the US job market remains strong despite four decades of high inflation and other economic pressures.

The Labor Department reported Thursday that applications for jobless aid fell to 229,000 for the week ending June 18, a drop of 2,000 from the previous week. First time applications generally reflect the number of layoffs.

The four-week average for claims, which smoothes out some week-to-week volatility, rose 4,500 to 223,500 from the previous week.

The total number of Americans collecting jobless benefits for the week ended June 11 was 1,315,000, up 5,000 from the previous week. The figure is close to a 50-year low for months.

Much of the recent job security and wage benefits that Americans have received recently have been offset by inflationary levels that haven’t been seen in four decades.

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Hiring Sign
Jobless benefits applications over the past few weeks, though still relatively low, are the highest since the first weeks of 2022.
Associated Press

Earlier in June, the Labor Department reported that consumer prices rose 8.6% last month — even higher than in April — compared to a year earlier. The Federal Reserve responded last week by raising its prime lending rate – its main tool for fighting rising prices – by three-quarters of a point. This increase is on top of a half-point increase in early May.

Three weeks ago, the government reported that US employers added 390,000 jobs in May, extending a streak of solid hiring that put the economy under pressure. Although job growth was good in May, it was the lowest monthly profit in a year and there are signs that there could be more layoffs in at least some sectors.

Jobless claims over the past few weeks, though still relatively low, are the highest since the first weeks of 2022.

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Online automotive retailer Carvana said last month that it was laying off about 2,500 employees, which makes up about 12% of its workforce. Online real estate broker Redfin, under pressure from a housing market that has cooled due to high interest rates, said last week that it was laying off 8% of its workforce.

Those cuts have expanded for companies in the cryptocurrency sector in recent months with the price cuts of bitcoin and other digital assets.

Crypto trading platform Coinbase Global said last week it was planning to cut about 1,100 jobs, or about 18% of its global workforce, as part of a restructuring to help it manage its operating expenses in response to current market conditions. is planned.

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