(Bloomberg) -- Recurring applications for US unemployment benefits jumped to the highest in about two years, adding to evidence of a cooling labor market. 

Continuing claims, which are a proxy for the number of people receiving unemployment benefits, rose to 1.93 million in the week ended Nov. 18, higher than all estimates in a Bloomberg survey of economists. This figure has climbed since September, suggesting out-of-work Americans are finding it more difficult to secure new employment.

Meanwhile initial jobless claims rose by 7,000 to 218,000 in the week ended Nov. 25, a period that included the Thanksgiving holiday. Given the figures tend to be particularly volatile around holidays, the four-week moving average offers a clearer picture of the trend in applications. That measure was little changed last week, according to a Labor Department report.

Overall, the labor market remains resilient, but Thursday’s figures are the latest indication its strength is ebbing. Unemployment has started to tick higher, even if it remains historically low, and wage gains have cooled. Although some businesses — particularly in the trades — are still struggling to fill open positions, the urgency to hire has subsided more broadly across industries.


What Bloomberg Economics Says...

“The persistent climb in continuing claims points to a risk that the unemployment rate will reach 4.0% in November... While some of the surge was likely due to issues in seasonally adjusting the data, anecdotes suggest labor demand is easing.”

— Eliza Winger, economist

To read the full note, click here

The Federal Reserve’s Beige Book survey of regional business contacts — published Wednesday and containing information gathered on or before Nov. 17 — showed a continued easing in labor demand. Most regional Fed banks reported flat to modest increases in employment in their districts, and reductions in headcounts through layoffs or attrition were reported.

The durability of the jobs market is key to the outlook for consumer spending and the economy writ large. Economists will continue to watch jobless claims — along with a range of other labor-related metrics — for signs of cracks in that robustness. Next week, the government will release its monthly jobs report, which will offer some insight into the pace of hiring in November.

Read More: US Consumer Spending, Inflation Slow in Sign of Cooling Economy

On an unadjusted basis, continuing claims dropped sharply, falling nearly 98,0000 and suggesting seasonal factors may be impacting the data. Unadjusted initial claims also fell, led by declines in California, Texas and Oregon. 

--With assistance from Kristy Scheuble.

(Adds comment from Bloomberg Economics)

©2023 Bloomberg L.P.