Jobless Claims Rise as Wholesale Inflation Ebbs
The number of Americans filing new claims for unemployment benefits jumped to a 1-1/2-year high of 264,000 last week, pointing to cracks in the labor market as demand slows, Reuters reported Thursday. This potentially gives the Federal Reserve room to halt further interest rate increases next month.
With demand cooling, inflation pressures are subsiding, reported Reuters. Producer prices rebounded modestly in April, leading to the smallest annual increase in wholesale inflation—2.3%—in more than two years, other data from the Labor Department showed on Thursday. The reports were seen as consistent with most economists’ expectations of a recession by year-end.
“The Fed looks closer to winning the war on inflation today, but it risks losing the war on keeping the economy afloat and away from the shoals of recession,” Christopher Rupkey, chief economist at FWDBONDS in New York, told Reuters.