The number of Americans filing for unemployment benefits rose more than expected last week, evidence the labor market is continuing to soften in the face of higher borrowing costs.
Figures released Thursday by the Labor Department show initial claims for the week ended April 15 rose by 5,000 to 245,000. That is above the 2019 pre-pandemic average of 218,000 claims.
Continuing claims, filed by Americans who are consecutively receiving unemployment benefits, also rose to 1.85 million for the week ended April 8, an increase of 61,000 from the previous week.
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The labor market has remained historically tight over the past year, but there are growing signs of a slowdown.
The economy added just 236,000 jobs in March, the lowest monthly gain since December 2020.
A separate report released earlier this month showed there were about 9.9 million job openings in February, the first time since May 2021 that the number of available jobs dipped below 10 million.
There has also been a wave of notable layoffs over the past few months, and the list grows longer by the day. Amazon, Apple, Meta Platforms, Lyft, Facebook, Google, IBM and Twitter are among the companies letting workers go.
Central bank officials have made it clear that they expect unemployment to climb as a result of higher rates, which could force consumers and businesses to pull back on spending. Job losses are "very likely," Fed Chairman Jerome Powell told lawmakers in March.
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Projections from the central bank's March meeting show that officials expect unemployment to rise to 4.6% by the end of next year, up from the current rate of 3.5%.
That could mean more than 1 million Americans lose their jobs between now and the end of 2023.
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Policymakers have already approved nine consecutive rate increases and have opened the door to a 10th increase at their next meeting in early May, although they have stressed the importance of upcoming economic data releases.
