The United States Department of Labor revealed that US citizens filing for unemployment benefits reached unprecedented levels. Initial claims rose to 261,000, marking a 28,000 increase from the previous week. According to experts, labour market softness is a possible reason for this surge, and could contribute to the Federal Reserve’s decision to change its hiking policy towards consumer-level inflation.
Despite the joblessness spike, the amount of jobless claims was expected to be 235,000, but had risen beyond initial expectations. Analysts estimated that continuing jobless claims would rise, with unemployment in California and Texas. However, non-farm payrolls in May exceeded expectations which saw payrolls figures rise by 339,000, while unemployment rose by 3.7%, a figure which was still historically low.
The main sectors driving job growth seem to be the service industry, specifically healthcare, education, and the national leisure and hospitality industries. Although the claims may raise concern, it is expected that the job market will bounce back in the coming weeks.
