The number of Americans filing for unemployment benefits rose more than expected last week. This is suggesting some loss of momentum in the labor market that we saw in late 2015. The decline is amid a sharp economic slowdown and stock market selloff.
A big sign of employment weakness was also flagged by another report on Thursday showing a 218 percent jump in announced job cuts by U.S.-based employers in January. This included lay-offs from big companies like Macy’s and Walmart. Planned layoffs were concentrated in the energy and retail sectors.
Initial claims for state unemployment benefits increased 8,000+ to a seasonally adjusted 285,000 for the week ended Jan. 30, the Labor Department said.
The rise in claims came as economic growth slowed to a 0.7 percent annual pace in the fourth quarter, held back by the headwinds of a strong dollar and faltering global demand..
Retailers announced plans to eliminate 22,246 jobs from their payrolls over the next few month which is the highest since January 2009. The retail cuts were dominated by Walmart. As you might have heard, they recently announced plans to close 269 stores worldwide. The energy sector also announced plans to reduce its number of employees by 20,246, up from 1,682 in December.
The reports come on the heels of weak data on manufacturing, export growth and consumer spending that have suggested the Federal Reserve will probably not raise interest rates in March. The U.S. central bank raised its benchmark overnight borrowing rate in December for the first time in nearly a decade.
U.S. stock index futures held losses after the data, while prices for Treasuries edged up. The dollar fell to a 15-week low against the euro and a two-week low against the yen.