U.S. labor market softens, slowly

WASHINGTON (Reuters Breakingviews) – The Federal Reserve is getting what it wants, but probably more slowly than it wants. The number of Americans receiving unemployment benefits, excluding those who are claiming for the first time, rose to nearly 1.7 million last week, according to U.S. government data released Thursday. That marked the highest count for so-called continuing jobless claims since early February. 

While bad for the claimants themselves, this is positive for the economy, because it means labor demand is finally cooling off. Fed policymakers have been looking for the U.S. hiring scramble to ease, since that’s likely to make wages grow more slowly, and reduce overall inflation. 

This will still be a long and painful journey. There were 1.7 job openings for every unemployed person in October. Wage growth was twice what economists had forecast in November, and continuing jobless claims remain below the average from before the coronavirus hit the United States. The Fed will need to see a much softer labor market before it brings rates back to earth.(By Ben Winck) 

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(Editing by John Foley and Sharon Lam)

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