U.S. unemployment benefit claims exceed forecasts…largest increase in five years

Largest increase since the COVID-19 period

"Need to consider the large volatility during holiday periods"

The number of new U.S. unemployment benefit claims rose by the largest margin since the COVID-19 pandemic.

According to the U.S. Department of Labor on the 11th, weekly initial unemployment claims for the week ending the 6th increased by 44,000 from the previous week to 236,000. This is the largest increase since March 2020.

The figure also far exceeded market expectations (222,000). A week earlier, because Thanksgiving was included, claims were the lowest in three years, but they rose sharply in a week.

Bloomberg News said, "Because weekly initial unemployment claims tend to be highly volatile around holiday periods, it's likely that volatility will continue through the end of the year," adding, "The figure released that day is also on the high side within the range recorded this year." Recently, several large companies, including PepsiCo, announced layoff plans. Nationwide layoff notices in October were at their highest level since early 2023.

The previous day, the U.S. central bank (Fed) lowered the benchmark interest rate by 0.25% percentage point. Fed Chair Jerome Powell said, "The labor market is cooling." However, officials said they do not expect the unemployment rate to be higher next year.

However, concerns about instability in the labor market are weighing on consumer sentiment. In the University of Michigan's preliminary December consumer survey, a majority of respondents expected the unemployment rate to rise over the next year.

Han Myung-hyun, reporter wise@hankyung.com