A hiring sign is displayed at a restaurant in Prospect Heights, Ill., on April 4, 2023. The hot jobs market has been defying a weakening economy and confounding the Federal Reserve for months, but now shows signs of cooling. The latest set of employment data from the government shows that job openings fell in March to their lowest level since April 2021. Layoffs rose to 1.8 million, their highest level since December 2020. (AP Photo/Nam Y. Huh, File)
By Matt Ott
The number of Americans applying for unemployment benefits last week rose to its highest level since October 2021, but the labor market remains one of the healthiest parts of the U.S. economy.
The Labor Department reported Thursday that U.S. applications for jobless claims were 261,000 for the week ending June 3, an increase of 28,000 from the previous week's 233,000. Weekly jobless claims are considered representative of U.S. layoffs.
The four-week moving average of claims, which evens out some of the weekly variations, rose by 7,500 to 237,250.
Despite last week’s sharp increase in filings for unemployment aid, some analysts cautioned against concluding that layoffs are picking up across the economy. They noted that the weekly figures are prone to revision and that last week’s numbers might have been distorted by the three-day Memorial Day weekend.
“The latest reading reflects a holiday-shortened week (Memorial Day), which ought to raise suspicions that the big move was more noise than signal,” said Stephen Stanley, chief U.S. economist for Santander. “I am eager to see next week’s reading before I draw any conclusions.”
The U.S. economy has added jobs at a furious rate since the pandemic purge of more than 20 million jobs in the spring of 2020. Americans have enjoyed unusual job security, despite the Federal Reserve's aggressive campaign to cool the economy and labor market in its bid to stifle persistent, decades-high inflation.
In early May, the Fed raised its benchmark lending rate for the 10th time in a row. There have been scattered signs that the Fed’s actions are working, but broadly, the job market continues to favor workers.
U.S. employers added a robust 339,000 jobs last month, well above expectations. Last week’s report painted a mostly encouraging picture of the job market but there were some mixed messages. Notably, the unemployment rate rose to 3.7%, from a five-decade low of 3.4% in April, the highest unemployment rate since October.
In April, employers posted 10.1 million job openings, up from 9.7 million in March and the most since January. Economists had expected vacancies to slip below 9.5 million.
Those reports, along with the jobless claims numbers, could help sway Fed officials one way or the other with regard to its next rate hike move. Most economists are predicting that the Fed will pause its rate hikes at its meeting next week, though the strong labor market could convince the central bank to stay the course with another small quarter-point increase.
The U.S. economy grew at a lackluster 1.3% annual rate from January through March as businesses wary of an economic slowdown trimmed their inventories. That’s a slight upgrade from its initial growth estimate of 1.1%.
Though the labor market remains strong, there have been notable high-profile layoffs recently, mostly in the technology sector, where many companies now acknowledge overhiring during the pandemic. IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn, Spotify and DoorDash have all announced layoffs in recent months. Amazon and Facebook parent Meta have each announced two sets of job cuts since November.
Outside the tech sector, McDonald’s, Morgan Stanley and 3M also recently announced layoffs.
Overall, 1.76 million people were collecting unemployment benefits the week that ended May 27, about 37,000 fewer than the previous week.
The merger of WarnerMedia and Discovery received Justice Department approval on Wednesday, and Patty Hirsch, EVP of consumer and digital platforms at WarnerMedia, joined Cheddar News to discuss current and future offerings from the media conglomerate that will control both HBO Max and Discovery+. "Content really drives so much, and CNN has always had a very long history of creating an incredible documentaries, incredible content … and this service I think is going to ultimately provide the kind of content consumers want and the kind of content that consumers are going are going to pay for," she said. Hirsch also discussed NFTs in use through its Turner Sports and DC brands.
Black entrepreneurs lead the way in the creation of new businesses, but they often cannot get the necessary funding to get their business off the ground. The Fearless Fund is on a mission to change that, and help Black business owners get venture capital. The fund also offers a unique grant program meant to help entrepreneurs with growth, peer coaching, and more, including grants between $10,000 and $20,000. Arian Simone, Co-Founder and General Partner of Fearless Fund, joins Closing Bell to discuss the Fund's mission, how it helps Black entrepreneurs, and more.
Multinational food company Kellogg’s reported an earnings beat amid supply chain issues and an extended labor strike. Kellogg’s Chairman and CEO c joined Cheddar News to discuss overcoming the obstacles and what's to come for the company. "The first half of the year is really going to be one about rebuilding inventory, and into the second quarter, starting to reestablish promotional activity for our customers and our consumers," Cahillane said. "And then the back half of the year, obviously, we're really much more back in business, and we expect to exit the year with our business in cereal being just as strong as it's ever been."
Sting has sold his catalog of more than 600 songs for $300 million to Universal Music. The deal gives the label the rights to all of his work, including “Every Breath You Take," as well as all future royalties.
Miller Lite is opening the first branded bar in the metaverse, by way of Decentraland, as a way to advertise during the Super Bowl this year without buying an expensive TV commercial slot. Sofia Colucci, global vice president of Miller Family of Brands, joined Cheddar to talk about the new marketing concept. "We have a lot of great partnerships with NFL teams throughout the year but were shut out of advertising during the Super Bowl game, so this pushes us to think creatively and also think of what feels really relevant right now," Colucci said. "There's no question that there's a lot of excitement with the metaverse, and we wanted to participate but in a way that felt right for Miller Lite."
Plans to add affordable housing to a development in Yellow Springs, Ohio, were squashed after comedian Dave Chappelle and other community members spoke out against the project. Chappelle threatened to pull the plug on his local comedy club and restaurant projects if the development had been approved.
Jason Moser, Senior Analyst at The Motley Fool, joined Wake Up With Cheddar to talk about the big takeaways from Disney's Q1 report, which showed the company nearing 130 million Disney+ subscribers as parks revenue ticks up.
The airline industry is seeing a major consolidation as Frontier and Spirit Airlines have agreed to merge in a deal valued at $6.6 billion dollars. Frontier will control just over 51% of the company, and Spirit will control the other 48%, creating what would become the fifth-largest airline in the U.S. The deal was approved over the weekend, with Spirit CEO Ted Christie saying that the merger aims to create an aggressive, low-fare competitor focused on consumer-friendly pricing. John Grant, Senior Analyst at OAG explains the gravity of the merger, and the wider impact it could have on competition and the airline industry as a whole.
