WASHINGTON -- The number of Americans applying for unemployment benefits rose last week to the highest level since August but still remains low by historic standards.
The Labor Department reported Wednesday that 240,000 people applied for jobless aid, up by 17,000 from the week before. The four-week moving average of claims, which smooths out week-to-week volatility, rose by 5,500 to 226,750.
"Initial jobless claims for the week ending Nov. 19 surged and continuing claims remained on a persistent uptrend, pointing at softening in the labor market. The 113,000 increase in continuing claims between the survey weeks for the November employment report is consistent with layoffs spreading in the technology industry, as hiring freezes and job cuts mount in select industries," economist Eliza Winger wrote in a report for Bloomberg Economics.
The list of high-profile technology companies announcing job cuts or hiring freezes has been growing, from Amazon.com to Facebook parent company Meta Inc. and personal-computer maker HP, which said this week it would eliminate as many as 6,000 jobs.
The mounting layoffs in the sector don't necessarily portend weakness in the broader market because many tech companies had ramped up hiring during the pandemic-era e-commerce boom. Still, other industries aren't immune. Even FedEx Corp. is furloughing workers in its freight unit ahead of what's usually the busiest season of the year for the company.
Applications for unemployment benefits are a proxy for layoffs and the current low levels shows that American workers enjoy extraordinary job security.
But it may not last.
To combat inflation that hit four-decade highs earlier this year, the Federal Reserve has raised its benchmark interest rate six times since March. The housing market has buckled under the strain of mortgage rates that have more than doubled from a year ago. And many economists expect the United States to slip into a recession next year as higher borrowing costs slow economic activity.
But the job market has remained strong. Employers added 261,000 jobs last month and are creating an average of nearly 407,000 a month this year -- on pace to make 2022 the second-best year for hiring (after 2021) in government records going back to 1940. There are nearly two job openings for every unemployed American. The unemployment rate is 3.7%, a couple of ticks above a half-century low.
New weekly applications for unemployment benefits were extremely low early this year -- staying below 200,000 for much of February, March and April. They began to tick up in late spring and hit 261,000 in mid-July before trending lower again.
The claims figures tend to be more volatile around U.S. holidays.
"We expect layoffs to rise as demand softens in response to higher interest rates," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a research report. "However, the move is likely to be gradual given businesses are still struggling with labor shortages and will be reluctant to cut their workforce."
The Labor Department said Wednesday that 1.55 million people were receiving unemployment aid the week that ended Nov. 12, up by 48,000 from the week before.
Information for this article was contributed by Paul Wiseman of The Associated Press and by Augusta Saraiva of Bloomberg News.