By Arlenys Tabare
According to data from the Department of Labor, Unemployment benefit applications increased again during the first week of May, adding about 12,000 applications to reach the seasonal 211,000, amid strong economic uncertainty due to the high price of energy due to the war in Iran.
The weekly jobless claims data are a thermometer to measure the health of the labor market in terms of indirect layoffs. Yes ok The unemployment rate currently remains above 4%, many economists consider it to be relatively low due to the current trend of “few hiring and layoffs.”
Geopolitical tensions, high tariffs, high inflation and the incorporation and investment in artificial intelligence have led many companies to slow down their hiring pace, especially in the technology sector, where the wave of layoffs this year has also been evident.
However, despite the current health of the labor market, Weekly jobless claims remain below their peak of 250,000, but the pace at which the number of subsidy applications increases is rapid; According to data from the Department of Labor, for the week ending May 2, online applications reached 1.78 million.
On the other hand, labor market figures are also a key indicator for the Federal Reserve, which to date keeps interest rates unchanged; However, Christopher Rupkey, chief economist at FWDBONDS, comments that “At this time there is no reason to consider interest rate cuts, as the labor market is rock solid,” dijo.
Rate cuts could bring relief to the market and lead to a rebound in job creation, but also further fuel inflation that is above 3%, far from the Fed’s objectives, Therefore, the decision of monetary policy regulators must be taken with great caution.
Keep reading:
- US business activity rebounds in April amid higher prices due to war in Iran
- Analysis reveals that one in five retirees in the US is looking for work due to economic need
- Job offers and hiring in the US were maintained before the impact of the war
