The number of Americans filing new claims for jobless benefits rose more than expected last week, another sign that labor market conditions are loosening as higher borrowing costs hurt demand in the economy.
Initial claims for state jobless benefits rose 11,000 to a seasonally adjusted 239,000 for the week ended April 8. Economists polled by Reuters had forecast 232,000 claims for the latest week.
An annual review of data published by the government last week showed claims were much higher so far this year than previously estimated, in line with high-profile layoffs in the technology industry as well as other sectors that are highly sensitive to interest rates.
Claims, however, remained below the 270,000 mark, a breach that economists said would signal a downturn in the labor market. Last Friday's jobs report showed a strong rate of job growth in March and the unemployment rate fell back to 3.5%, while wage gains remained modest.
Although job openings fell below 10 million at the end of February for the first time in nearly two years, there were 1.7 vacancies for every unemployed person that month, which could make it easier for some laid-off workers to find work.
There are no signs yet that the tightening of credit conditions following the failure of two regional banks last month has led to job losses. Economists expect small businesses such as restaurants, bars and nail salons to be hit hard by the credit crunch.
Financial markets are betting that the Federal Reserve will raise rates by another 25 basis points at its May 2-3 policy meeting, according to CME Group's FedWatch tool. That would likely be the last rate hike in the U.S. central bank's fastest-ever monetary policy tightening campaign. since the late 1980s.
The Fed last month raised its benchmark overnight interest rate by a quarter of a percentage point, but indicated it was on the verge of halting further rate hikes in a sign of financial market turmoil. The Fed has raised its policy rate by 475 basis points since last March from near zero to the current 4.75%-5.00% range.
The number of people receiving benefits after the initial week of aid, a proxy for hiring, fell 13,000 to 1.810 million in the week ended April 1 based on the claims report.
