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 gambling industry has seen a boom since shutting down in 2020, outpacing even pre-pandemic levels. But as gamblers have returned to the tables, there's been a rise in reports of gambling addiction as well. Sara Slane, founder of Slane Advisory and sports betting/casino gaming executive, joined Cheddar to discuss the state of the gambling industry.
Shares of Peloton recovered after CEO John Foley debunked rumors that the company would halt production of some products, confirming that the company will instead be quote 'right-sizing' production as it faces lagging demand.
This comeback for the stock comes after reports surfaced that Peloton could completely hit the brakes on production of its bikes and treadmills. In the last year, Peloton has wiped nearly $40 billion off its market cap, with its stock down over 70% in 2021. Doug Astrop, managing partner at Exponential Investment Partners, joined Cheddar Movers to discuss.
After an intense hours-long meltdown Monday, stocks closed higher in a last minute, stunning comeback. At one point, the Dow shed over 1,000 points, the tech-heavy Nasdaq was down close to 5% and inching toward correction territory, and the S&P 500 briefly hit a correction earlier in the day. During most of Monday's session, stocks were on track to mark their worst months since March 2020, and for the Nasdaq, since October 2008. Philip Palumbo, Founder, CEO and Chief Investment Officer of Palumbo Wealth Management, joined Cheddar News' Closing Bell to discuss today's stunning market comeback, whether there's more room for stocks to fall, his 2022 market predictions, and more.
Bobby Zagotta, CEO of Bitstamp USA, joins Cheddar News' Closing Bell, where he discusses what he expects to see from Bitcoin and other cryptocurrencies amid a volatile period in the market, and explains how his crypto exchange is helping investors.
Markets started the week on a rocky note: the major indexes at most points during the day were double digits off of their highs, on the path to their worst performances since March 2020 and for the Nasdaq, since October 2008. Investors were skittish about the Federal Reserve's meeting this week, where the central bank is expected to announce more details about its plans to hike interest rates and taper asset purchasing this year. Art Hogan, Chief Market Strategist at National Securities, joined Cheddar News' Closing Bell to discuss today's market meltdown, why investors were feeling pressure, what to expect from the Fed, and more.
AT&T announced it's offering two tiers of high-speed internet, 2 gigs, and 5 gigs, to its fiber customers in more than 70 metro regions. AT&T Consumer CEO Thaddeus Arroyo joined Cheddar to talk about the newly available speed upgrades for 5.2 million of its customers, and where the rollout goes from here. "Over the course of 2022, we'll rapidly continue to retrofit the rest of the base," he said. "And importantly now is, as we build-out, we've talked about building out to cover 30 million homes and businesses by the end of 2025, we're going to continue to ensure that every new location that we stand up has this multi gig capability."
Autonomous driving tech company Waymo is partnering with transportation and logistics business J.B. Hunt. The two firms are teaming up to bring autonomous shipping to the highways. Head of commercialization for trucking at Waymo, Charlie Jatt, joined Cheddar to discuss how the companies are combining their strengths. "We, of course at Waymo, are working on the technology side of affairs, and J. B Hunt brings critical operational and commercial expertise," Jatt said. "And together we're going to work to deploy the first fully autonomous Class 8 truck hauling goods for one of their customers in the coming years in Texas."
Amid a rough week for Peloton's stock, as well as its image — its bikes being the cause of death for two fictional TV characters now — an activist investor is calling for a change in upper management. Chief investment officer of Blackwell, Jason Aintabi, petitioned in a letter that Peloton’s CEO, John Foley, must be fired. Joining Cheddar to discuss the ultimatum, Hatem Dhiab, a portfolio manager and managing partner at Gerber Kawasaki Wealth and Investment Management noted the conditions leading to the demand for Foley's removal. "The stock is basically 85 percent below the high," he said. "I think there is some change that needs to happen, and that's just the reality."
