Jobless Claims Rise, Even as Firms Report Worker Shortages

(CN) — The number of Americans seeking unemployment benefits rose slightly the last week of May, despite a larger number of employers reportedly complaining of worker shortages in a growing number of occupations.

The Labor Department said Thursday that jobless benefits claims rose for the second straight week in the week ending May 26 to 248,000. It represented a gain, week-over-week, of 13,000.

The less volatile four-week average rose 2,500 to 238,000.

Applications are typically seen as an indicator of layoffs. Despite the uptick, applications have been below 300,000, a historically low figure, for 117 weeks. That’s the longest streak since 1970.

Payroll processor ADP said Thursday that private businesses across the U.S. added a robust 253,000 jobs in May.

According to ADP that the hiring primarily came from companies with fewer than 500 employees_which accounted for more than 75 percent of the jobs added last month. Total hiring is up from 174,000 jobs in April and nearly matched the 255,000 jobs added in March, the payroll company said.

In the meantime, the Federal Reserve reports that the economy continued to grow in April through late May.

In its latest Beige Book report, a survey of economic conditions released Wednesday afternoon, the Fed found that most of its 12 regions viewed economic growth as moderate to modest rates.

Two districts — Boston and Chicago — said growth had slowed, while the New York Fed  said business activity in the region had flattened out.

Businesses reported that labor markets continued to tighten, and many firms were offering higher wages where shortages were most severe.

Even with the tightening labor markets and more companies offering higher wages, the Fed said that business contacts noted little change to the broader recent trend of modest to moderate wage growth.

In terms of overall inflation, the Fed report said that price pressures were little changed from the previous report. However, it noted “rapidly rising costs for lumber, steel and other commodities,” which tended to push up supply costs for some manufacturers and the construction industry.

In contrast, the report said that some districts reported falling prices for some consumer goods such as groceries, clothing and autos.

Energy prices and farm prices were reported as mixed, but low inventories of available homes for sale were pushing up real estate prices in many markets.

The information in the Beige Book will be used when Fed officials meet June 13-14. The Fed is expected to raise a key interest rate at the meeting.

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