The numbers: New U.S. jobless claims rose to a four-month high of 218,000 last week, but most of the increase appeared tied to just a few states such as Kentucky and California. The number of people applying for unemployment benefits was still extremely low.
Applications for unemployment benefits climbed by 21,000 from 197,000 in the prior week, the Labor Department said Thursday.
Economists polled by the Wall Street Journal forecast initial jobless claims to total a seasonally adjusted 200,000 in the seven days ended May 14.
Applications for unemployment benefits fell to a 54-year low of 166,000 in March and have hovered around 200,000 since the beginning of the year.
Big picture: The labor market is still extremely strong. Job openings are at record high and many companies complain they can’t find enough workers.
A handful of large companies such as Amazon
have recently indicated they plan to scale back hiring or even reduce staff, but there’s little sign that layoffs are about to become widespread.
Economists are watching closely, however, because jobless claims typically start to rise before a recession. There’s growing worry that a downturn is possible with the Federal Reserve raising interest rates to try to tame the worst inflation in 40 years.
Key details: Raw, or unadjusted, jobless claims rose sharply in Kentucky and also increased notably in California.
Yet most states showed little change and more than half reported declines, suggesting the labor market is still quite strong.
The number of people already collecting unemployment benefits, meanwhile, fell by 25,000 to 1.32 million in the week ended May 7. That’s the lowest level since 1969.
These so-called continuing claims are reported with a one-week lag.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open lower in Thursday trades. The Dow sank more than 1,000 points on Wednesday on renewed worries about the economy.