The labor market took an unexpected turn for the worse last week, revealing just how fragile the U.S. economy really is.
The number of Americans applying for unemployment benefits rose to the highest level since October. Jobless claims rose for the third week straight, Labor Department data shows.
Initial jobless claims rose to 286,000, from 231,00 the week prior, well above estimates. In fact, experts expected claims to fall to 225,000.
Continuing claims also shot up, rising 84,000 to 1.64 million. The unemployment rate stands at 3.9%. Still, total employment is still 2.9 million below to where it was at the start of the pandemic.
Experts are jumping to blame the Omicron variant for a surge in unemployment claims. Others point to the fact that consumer spending might be slowing, as Americans likely already spent their stimulus checks.
The pandemic is not the only issue for the economy. Structural problems abound, not just for the U.S., but for the rest of the world.
Moreover, the Fed’s hawkish turn on interest rates could also play a role. Investors may worry that, without monetary stimulus, the economy doesn’t have much going for it.
With the economy as fragile as it is, investors are looking for safe havens and inflation hedges. Gold shot up from $1,837 to $1,847 before settling at $1,840. The total crypto market cap gained 3.4%, with Bitcoin breaking $43,000.