Last week, the number of Americans filing new claims for unemployment benefits rose to a three-month high. This sharp increase in applications is due to the increase in the number of layoffs in the technology sector. However, this does not indicate a significant change in conditions in the labor market, which is still tight.
Economists urged the public not to attach great importance to the rise in weekly jobless claims that the US Department of Labor announced on Wednesday. Economists also noted that unemployment data tends to be volatile at the start of the holiday season. They attributed this to companies temporarily closing or slowing down hiring during the holidays.
According to Isfar Munir, an economist at Citigroup in New York, the increase in applications could be interpreted as evidence of a softening labor market. However, economists say we cannot be interpreting it this way, as the holiday season brings more volatility to this data. Understanding the impact of seasonal patterns versus layoffs can be easier in January.