Applications for US unemployment benefits rose last week to touch their highest level in over a month, though the labour market broadly retained its footing even as economic pressures from the Iran war and rising inflation continued to mount.
Initial jobless claims increased by 5,000 to 2,15,000 in the week ended May 23, the highest reading since mid-April, according to Labor Department data released Thursday. Continuing claims, a proxy for the number of people currently receiving unemployment benefits, rose to 1.79 million in the prior week.
Despite the uptick, both metrics remain near historically low levels, suggesting the labour market has so far proven resilient in the face of widely announced job cuts, particularly among white-collar workers in the technology sector.
Bloomberg Economics analyst Eliza Winger noted that the underlying trend remains firm: “Initial jobless claims continue to run below year-ago levels. Expectations of AI-driven automation and heightened geopolitical uncertainty haven’t had a meaningful impact on weekly unemployment insurance claims activity so far.”
The four-week moving average of new applications, which smooths out week-to-week volatility, climbed to 2,09,000. Before seasonal adjustments, initial claims rose last week, with Kansas, Missouri, and Illinois leading the gains.
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The labour market data arrives on the same day as a separate report showing US consumer spending barely moved in April, with annual inflation accelerating to 3.8%, its highest since 2023, as surging energy costs tied to the Middle East conflict reverberate through the economy.
Inflation-adjusted disposable income fell for the third straight month, and the personal saving rate dropped to its lowest level since 2022, painting a picture of households increasingly stretched by the cost of living.
Together, the two reports present a nuanced economic portrait — a jobs market that remains stable on the surface, but one operating within an economy where inflation is accelerating, consumer confidence is at record lows, and the financial cushion that households built during the pandemic years is steadily eroding.
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