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New US Jobless Claims Down

FILE - A help wanted sign is displayed in Deerfield, Illinois, Sept. 21, 2022.
FILE - A help wanted sign is displayed in Deerfield, Illinois, Sept. 21, 2022.

WASHINGTON - Fewer U.S. workers applied for jobless benefits last week - after a previous spike that many analysts took as a sign that higher interest rates were finally cooling the labor market. It turns out the recent jump in jobless benefit applications was largely due to fraudulent applications.

The U.S. Labor Department said Thursday that applications for jobless benefits for the week ending May 13 fell by 22,000 - to 242,000.

Overall, 1.8 million people were collecting unemployment benefits the week that ended May 6, about 8,000 fewer than the previous week.

The weekly claims numbers are broadly as representative of the number of U.S. layoffs.

The four-week moving average of claims, which flattens some of the week-to-week fluctuations, ticked down by 1,000 to 244,250. Analysts have pointed to a sustained increase in the four-week averages as a sign that layoffs are accelerating, but are reluctant to predict that a spike in layoffs is imminent.

In April, U.S. employers added 253,000 jobs - and the unemployment rate dipped to 3.4%, matching a 54-year low. But the figures for February and March were revised lower by 149,000 jobs, potentially signaling that the Fed’s rate policy strategy is starting to cool the job market.

The government also recently reported that U.S. job openings fell in March to the lowest level in nearly two years.

There have been an increasing number of high-profile layoffs recently, mostly in the technology sector, where companies added jobs at a furious pace during the pandemic. IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November.

But it’s not just the tech sector that’s trimming staff. McDonald’s, Morgan Stanley and 3M also announced layoffs recently.

Last month, the Commerce Department reported that U.S. economy slowed sharply from January through March, decelerating to just a 1.1% annual pace as higher interest rates hammered the housing market and businesses reduced inventories.