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Continuing applications for US unemployment benefits rose to the highest level in almost two years, underscoring the increasing challenges unemployed workers are facing in finding new jobs.
Recurring jobless claims, a proxy for the number of people continuously receiving unemployment benefits, jumped to 1.87 million in the week ended Nov. 4, according to Labor Department data out Thursday. That marked an eighth straight week of increases.
Initial jobless claims also rose, to 231,000 in the week ending Nov. 11. That was the highest since August.
Although it’s difficult to draw conclusions from volatile weekly numbers, the rise in jobless claims, combined with other data out this week, indicates some cooling in the labor market, price pressures, and consumer spending.
A separate report Thursday showed that US factory production fell in October by more than expected, largely reflecting a strike-related pullback in activity at automakers and parts suppliers. Homebuilder sentiment dropped to the lowest level this year in November as high mortgage rates kept a lid on housing demand.
The reports reinforced speculation among traders that the Federal Reserve is done with raising interest rates.
While a resilient labor market has been supporting economic growth this year, many economists expect it to lose steam under the weight of higher borrowing costs. Companies are now adding jobs at a slower pace, unemployment is rising and wage growth has decelerated, leading to some pullback in spending ahead of the holiday season.
The jobless claims data tend to be especially choppy around the holidays, and last week included Veterans Day. The four-week moving average of initial claims, which smooths out some of that volatility, rose to 220,250.
What Bloomberg Economics Says...
“The jump in initial claims, combined with the persistent rise in continuing claims, is translating to a durable softening in the labor market. The report signals the unemployment rate is on track to edge higher in November from 3.9% in October, signaling the Fed is done hiking rates this year.”
— Eliza Winger, economist
To read the full note, click here
On an unadjusted basis, initial claims also picked up, with Massachusetts and New York logging the biggest increases. Unadjusted continuing claims fell for the first time in four weeks, led by California and Michigan.
“If the numbers trend sharply higher, that would be a signal that needs to be noted, but a single outlier reading this time of the year is best ignored until or unless the direction of weekly moves starts to consistently stack up in one direction,” Stephen Stanley, chief economist at Santander US Capital Markets, said in a note.
This week’s claims figures correspond with the reference period for the monthly employment report published by the Bureau of Labor Statistics.
General Motors (GM.N) tentative labor deal with the United Auto Workers (UAW) union has clinched ratification, making its workers the first of those at the Detroit Three automakers to approve the agreement.
Attention now shifts to ongoing voting at Ford (F.N) and Chrysler parent Stellantis (STLAM.MI), where current margins in favor of the deal suggest the agreement will be approved comfortably.
The vote locks in the UAW's tentative agreement with GM after an unprecedented six-week campaign of coordinated strikes at all three automakers that focused attention on boosting workers' wages. Ultimately, the union was able to clinch record pay hikes for auto workers after years of stagnant wages and painful concessions following the 2008 financial crisis.
The UAW's GM vote tracking site shows approval of the contract leading by a 55% to 45% margin with nearly 36,000 workers having cast votes out of about 46,000 UAW-represented GM workers. All the facilities voting have reported results.
Officials at the UAW and GM did not immediately comment. GM shares were down 1.1% in Thursday trading.
Voting ends on Thursday at 4 p.m. EST (2100 GMT), although most votes were cast by Wednesday.
While the UAW has not formally announced the ratification, it would mark the first approval of a deal, which runs through April 2028, with one of the Detroit Three. Voting at Ford and Stellantis is still underway.
All three companies agreed to tentative agreements about two weeks ago.
Seven of GM's 11 assembly plants rejected the deal. However, the largest assembly plant in Arlington, Texas, approved the agreement along with assembly plants in Detroit; Fairfax, Kansas; and Lake Orion, Michigan.
The UAW's new agreement with GM grants a 25% increase in base wage through April 2028 and will cumulatively raise the top wage by 33%, compounded with estimated cost-of-living adjustments to over $42 an hour.
Currently, about 67% of Ford workers who have voted are in favor of the UAW deal, and about 66% of Stellantis workers have so far voted in favor, according to UAW figures. Ford voting is scheduled to finish on Friday, while Stellantis is set to close next Tuesday.
Automakers were previously slashing costs and navigating a bumpy road to manufacture EVs and catch up with market leader Tesla (TSLA.O), but lower margins on those vehicles have deterred them from accelerating the move.
GM in October also pulled its full-year profit forecast due to the strike and postponed a $4 billion electric truck plant in Michigan.
Workers at hundreds of Starbucks (SBUX.O) stores have walked off their jobs during a key promotional event on Thursday, demanding improved staffing and schedules, the Workers United said on social media platform X.
The walkout comes on the coffee chain's Red Cup Day event, during which Starbucks hands out free red-colored, reusable, holiday-themed cups to customers on their coffee purchases.
Starbucks said on Thursday its stores in the United States were "open", adding that "a few dozen stores with some partners (were) on strike", but more than half of those stores were open this morning, "serving customers".
About a dozen workers picketed outside Starbucks' Astor Place outlet at the New York University's campus chanting "no contract, no coffee" and other rhymes. Meanwhile, Astor Place continued to fill with NYU staff and students placing orders.
Red Cup day has typically been a major driver of store traffic, with Placer.ai data showing that visits to U.S. Starbucks stores on the day last year jumped 94% over the daily average for the full year.
Workers United, which represents more than 9,000 Starbucks employees at about 360 U.S. stores, has said the event was one of the "most infamously hard, understaffed days", as drink orders pile up and employees end up on the receiving end of abuse from frustrated customers over long wait times.
[1/3]Members of the Starbucks Workers Union and other labor organization picket and hold a rally outside a company-owned Starbucks store, during the coffee chain's Red Cup Day event in New York City, U.S., November 16, 2023. REUTERS/Brendan McDermid Acquire Licensing Rights
Mary Boca, 22, Astor Place, New York barista, said she wants to see higher pay and more staff at Starbucks.
"I have heard our managers saying they need to hire 12 people. At a peak period, that's a lot of people to be out of."
Boca said that her Starbucks location does not allow customers to tip, which leaves her without an extra $100 in each paycheck.
Edwin Palma Solis, 24, a worker at Astor Place, said he thinks the inability of customers to tip at the store has deterred some potential hires from joining the location.
Starbucks has nearly 10,000 U.S. company-owned locations, and according to the company, less than 3% of those stores are represented by a union.
Last year, workers at more than 100 U.S. company-owned Starbucks locations held a one-day strike on Red Cup day.
Earlier this month, Starbucks said it would raise hourly pay for its U.S. retail workers by at least 3% from 2024, which employees criticized, calling it "tone deaf" given Starbucks' 11% increase in fourth-quarter revenue and the recent wage hikes won by auto workers.