Economists Urge Caution As Unemployment Benefits Skyrocket To More Than 260K Claims

Recently, the U.S. Labor Department saw a spike in unemployment benefit applications.

The Associated Press reported the number of unemployment benefits applications was the most since October 2021. According to the U.S. Department of Labor, the number of jobless claim applicants on June 3, 2023, was 261,000. The number increased by 28,000 compared to the previous week, which ended May 27, 2023. Moreover, the unemployment rate rose to 3.7% from 3.4% in April 2023.

Stephen Stanley, chief U.S. economist for Santander, said Memorial Day weekend may have impacted the numbers. Per the Associated Press, he said, “The latest reading reflects a holiday-shortened week (Memorial Day), which ought to raise suspicions that the big move was more noise than signal.” As a result, Stanley added that he would not conclude that layoffs are increasing overall. “I am eager to see next week’s reading before I draw any conclusions,” he said.

The Federal Reserve raised its benchmark lending rate in May 2023, and economists think there will be a pause on rate hikes next week.

Both unemployment and hiring have increased. The Associated Press also reported U.S. employers added 339,000 jobs in May 2023.

How are Black people managing? The unemployment rate for Blacks is the lowest it has ever been. This year, the U.S. Bureau of Labor Statistics recorded 5.5% of Black or African American people ages 16 and older are unemployed. The number is a 1.3% decrease from 2022. Black or African American women are unemployed at a 5.1% rate. Black or African American men are unemployed at a higher rate (6.0%). When comparing total unemployment rates for 2023, Hispanics follow closely behind with 5.4%, whites 3.5%, and Asians 3.1%.

Data from the U.S. Bureau of Labor Statistics showed in 2021 that the unemployment rate was highest for Black people. Unemployment was 8.6% for Blacks and 4.7% for whites. Other data showed 6.8% unemployment for Hispanics and 5.0% for Asians.