Jobless claim applications surged last week, reaching their highest point in four years.
The number of people in the United States who filed for unemployment in the week ending Sept. 6 rose by 27,000 to 263,000, the Labor Department said Thursday.
That figure represents the most unemployment applications since the week of Oct. 23, 2021. Economists forecast that the country would see 231,000 new applications.
Experts now believe this will lead the Federal Reserve to cut its benchmark interest rate next week. The Fed typically cuts its key rate when unemployment rises to advance more spending and growth. Fed officials have expressed increased concern in recent weeks about the weak labor market, more so than they have about inflation.
“The hot inflation print will not likely change the Fed’s plan to cut rates in September, but it’s possible the Fed will hold in October if inflation expectations no longer look well-contained,” said Jeffrey Roach, chief economist for LPL Financial.
The figures come as the labor market appears to be on shaky footing. The unemployment rate in the U.S. stands at 4.3% as of August.
THERE ARE MORE JOBLESS AMERICANS THAN JOB OPENINGS: BLS
The Bureau of Labor Statistics said Tuesday that payroll jobs will likely be 911,000 lower than previously thought, adding to the evidence that the labor market is much weaker than numbers have recently indicated. Additionally, the economy added just 22,000 jobs last month, falling well below the 80,000 experts expected.
There are also more people seeking jobs in the U.S. than there are job openings, a point that hasn’t been met in four years. Workers in the U.S. are also expressing low confidence in their ability to move jobs.
