The number of Americans applying for unemployment benefits rose to its highest level since August, though it remains low by historic standards.

About 240,000 people applied for unemployment benefits last week, 17,000 more than the week before, the Labor Department said Wednesday. The four-week claims moving average, which smooths out weekly volatility, rose 5,500 to 226,750.

Unemployment claims are a replacement for layoffs. While job cuts remain low from historical levels, that could change when the Federal Reserve raises interest rates to cool down inflation.

The Fed has raised its benchmark interest rate six times since March, driving down stock valuations and sending the housing market crashing under pressure from mortgage rates, which have doubled from a year ago. Many economists expect the US to fall into recession next year as higher financing costs slow down economic activity.

In recent weeks, large tech companies, including Amazon, goalSnap, HP and Twitter are laying off tens of thousands of workers as they adapt to a slower environment. A continuation of the central bank’s hike campaign could lead to even bigger cuts in the previously fast-growing sector.

“All companies benefit from low borrowing costs, but technology in particular has benefited from low borrowing costs because so much of their revenue is projected into the future. These are growth companies,” said Nela Richardson, chief economist at ADP.

She added: “Tech companies account for only 2 percent of employment in the US, so while tech layoffs affect individual companies and their employees, employment in this sector accounts for a very small percentage of the overall job market.”

The mass layoffs in Meta point to the woes of Silicon Valley


Employment has generally held steady, with employers adding 261,000 jobs last month and create an average of nearly 407,000 per month this year – at a rate that will make 2022 the second-highest employment year (behind 2021) in government records dating back to 1940. There are almost two vacancies for every unemployed American . The unemployment rate is 3.7%, a few notches above the lowest level in half a century.

The number of new weekly claims for unemployment benefits was exceptionally low at the beginning of this year – it stayed below 200,000 for most of February, March and April. It started to rise in late spring and reached 261,000 in mid-July before falling again.

“We expect layoffs to increase as demand weakens in response to higher interest rates,” Rubeela Farooqi, chief US economist at High Frequency Economics, said in a research report. “However, the move is likely to be gradual, given that firms still face labor shortages and will be reluctant to cut their workforce.”

The Labor Department said Wednesday that 1.55 million people received unemployment assistance in the week ending Nov. 12, 48,000 more than the week before.

Irina Ivanova of CBS News provided the reports.

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