The Labor Market Cools—A Little

There are more signs that the long-awaited recession may be approaching.

April 21, 2023

ALEXANDRIA, Va.—“The number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labor market was gradually slowing as the Federal Reserve's year-long interest rate hiking campaign dampens demand,” reports Reuters.

Unadjusted claims dropped 7,021 to 228,216 last week as a surge of 6,703 in applications in New York and an increase of 3,079 in Georgia as well as notable rises in Connecticut and Rhode Island were offset by decreases in California, Texas, Pennsylvania, Indiana and Ohio.

The number of people collecting unemployment benefits in the U.S. jumped by 61,000 to a total of 1.87 million in the week ending April 8. That’s the highest level since November 2021.

Other indicators that suggest a slowdown include tighter lending, a slowed stock market and a weak housing market.

“Manufacturing is also feeling the heat of higher borrowing costs, with a fourth report from the Philadelphia Fed showing its measure of factory activity in the mid-Atlantic region plunging to the lowest level in nearly three years in April,” according to Reuters.

The Wall Street Journal noted that the jobs data “are also consistent with other evidence that the job market is moderating, but is still quite strong.”

Earlier this month, the Labor Department said that there were 9.9 million open jobs in February, a decline from 10.6 million in January. “It marked the first time since May 2021 that the number of available jobs dipped below 10 million. However, job openings remain historically high: Before the COVID-19 pandemic began in early 2020, the highest on record was 7.6 million. There are roughly 1. 7 jobs per unemployed American,” according to FOXBusiness.