The number of Americans filing new claims for jobless benefits tumbled last week after the US Labor Department reversed all of the previous week's additions that took filings to a year-and-a-half highs, as investigators in the state of Massachusetts cited fraudulent claims
WASHINGTON (Pakistan Point News / Sputnik - 18th May, 2023) The number of Americans filing new claims for jobless benefits tumbled last week after the US Labor Department reversed all of the previous week's additions that took filings to a year-and-a-half highs, as investigators in the state of Massachusetts cited fraudulent claims.
The latest tally for weekly jobless claims across the United States was back at 242,000 for the week that ended on May 13, the same as during the week to April 29. The increase of 22,000 filings for the week to May 6, which largely cropped up in Massachusetts and took total claims to October 2021 highs, was erased by the Labor Department.
"The Massachusetts Department of Unemployment Assistance is experiencing an uptick in fraudulent attempts to access unemployment insurance benefits," Executive Office of Labor and Workforce Development in Massachusetts said in a statement on Thursday. "Fraudulent attempts are increasing across the country, and Massachusetts is no exception. The increase seen in initial weekly unemployment claims is not reflective of individuals filing for unemployment insurance but rather fraudulent attempts on the system."
The Labor Department weekly report on jobless claims, along with its more important monthly non-farm payrolls report, are closely scrutinized by the market for a cue on what the Federal Reserve could do with interest rates.
The US central bank has raised interest rates by ten times since the end of the coronavirus pandemic in March 2022, adding a total of 5% to the previous 0.25%.
After its last rate hike, the Fed said it will "closely monitor" data in the coming months and assess their effectiveness in helping the United States return to its inflation target of 2%. That had given hope to the central bank's watchers that the Fed could call for a pause at its next decision on rates on June 14.
"Apart from Massachusetts, initial claims have stabilized in recent weeks after drifting higher in (the first quarter), a reminder that labor market conditions are still relatively tight," Nancy Vanden Houten, Oxford Economics lead US economist, said. "While we expect the (Federal Reserve) to leave rates steady at its June meeting, a resumption of rate hikes can't be ruled out if labor market conditions don't ease more significantly."
The Fed has identified robust job and wages growth as two of the key drivers of inflation.
The central bank has a mandate of ensuring maximum employment through a jobless rate of 4% or below and of keeping inflation manageable. The last was a task easily achieved before the COVID-19 breakout, when prices expanded less than 2% a year. The pandemic and the trillions of dollars of relief spending by the government, however, have triggered runaway inflation since mid-2021.
The labor market has been the engine of US economic recovery from the COVID-19 pandemic measures, with hundreds of thousands of jobs being added without fail since June 2020 to make up for the initial loss of 20 million jobs to the pandemic. Average monthly wages have also grown without a stop since May 2021.
