Unemployment Claims Reach Three-Month High Amid Fed's Anti-Inflation Efforts

Despite the rise in jobless claims, the labor market remains broadly healthy, with further slowdown needed for inflation to return to a sustainable path.

Unemployment claims rose by 13,000 last week, more than triple what forecasters had expected, reaching a three-month high of 231,000.
The increase in jobless claims is seen as a potential sign that the labor market is cooling, possibly due to the Federal Reserve's interest rate hikes aimed at combating inflation.
Continuing claims, or requests for benefits from people already unemployed, rose to the highest level in two years, indicating it may be getting harder for unemployed people to find new work.
Despite the rise in claims, the labor market is still considered broadly healthy, with job growth remaining strong and businesses not yet significantly reducing their workforce.
The Federal Reserve has raised its benchmark interest rate 11 times since March 2022 to combat inflation, and while inflation is showing signs of subsiding, further slowdown in the labor market and wage growth is needed for inflation to return to a sustainable path back to 2%.