The U.S. Department of Labor reported today that initial claims for state unemployment benefits rose by 22,000 to 264,000 in the week ending May 6. This is the highest level for initial claims since Oct. 30, 2021.
The increase was driven by a rise in layoffs in the leisure and hospitality, construction and manufacturing sectors, and is a sign that the labor market is slowing down. Economists are watching closely to see how the labor market responds to the Federal Reserve's rate hikes. If the labor market weakens significantly, it could lead to a recession.
U.S. employers added 253,000 new jobs in April, beating economists' expectations, and the unemployment rate ticked down to 3.4 percent, one of the lowest levels on record, according to the latest employment report from the U.S. Bureau of Labor Statistics.