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Weekly unemployment benefit claims increase, but labor market remains tight

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New unemployment benefit claims increase

The number of Americans filing new claims for unemployment benefits increased to the highest level in nearly five months last week, but that is not likely to mark a material shift in labor market conditions, which remain extremely tight.

The report from the Labor Department on Thursday also showed that unemployment rolls remained at a more than 52-year low at the end of May, underscoring the jobs market’s strength.

Amid reports of companies freezing hiring or contemplating layoffs in anticipation of a recession next year, the weekly jobless claims data is being closely watched. Overall demand for labor, however, remains strong, with 11.4 million job openings at the end of April. Economists largely shrugged off last week’s larger-than-expected rise in claims as noise.

Initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 229,000 for the week that ended June 4, the highest since mid-January. Economists polled by Reuters had forecast 210,000 applications for the latest week.

The data included the Memorial Day holiday. The seasonal factors, the model that the government uses to strip out seasonal fluctuations from the data, had expected a drop of 21,362 in unadjusted claims, as hiring typically increases in summer. But with worker shortages rampant, there is limited room for big decreases and unadjusted claims are already at very low levels.

Unadjusted claims edged up 1,008 to 184,604 last week. There were notable increases in applications in Florida, Georgia and Pennsylvania, which offset declines in Mississippi and Michigan.

— Reuters

European airports hit with labor troubles

Labor strife and staffing shortages have European airports clamoring to find more workers, minimize canceled flights and reduce headaches for travelers during the busy summer season.

Workers at France’s Charles de Gaulle airport were striking Thursday for more pay, with a quarter of flights canceled. In Italy, crews from budget carriers Ryanair, easyJet and Volotea walked off the job on Wednesday.

On Wednesday evening, German flag carrier Lufthansa and its subsidiary Eurowings said they were scrapping over 1,000 flights in July, or 5 percent of their planned weekend capacity, because of staff shortages amid the busy vacation period.

Ryanair cabin crew could strike in Europe this summer, after talks ended with two Spanish unions, according to a statement by unions SITCPLA and USO.

Airport managers are struggling to quickly recruit and process new hires, as a rebound in air travel from a pandemic-induced slump leads to canceled flights and hours-long lines.

Airlines, battered by slumping travel during the pandemic, have been counting on a strong summer, as fares rise to offset higher fuel costs. Some countries are also banking on tourism to revive hard-hit economies.

The head of airline trade group the International Air Transport Association (IATA) has said heavy congestion also occurred before the pandemic and is now limited to certain airports, aggravated by delays to get security badges required for newly hired staff.

— Reuters

Canada's Nutrien, the world's largest fertilizer producer, said it plans to increase potash production to an annual 18 million tons by 2025 to mitigate supply uncertainty from Eastern Europe. Prices of potash, a key input used in nitrogen fertilizers, have soared since Western sanctions were imposed on Russia for its invasion of Ukraine, exacerbating an already tight market. The increase in potash production represents a rise of 40 percent compared with production in 2020, Nutrien said.

Ericsson said the U.S. securities regulator has opened an investigation concerning the matters described in the company's 2019 Iraq investigation report. The Swedish telecom equipment maker said it was fully cooperating with the Securities and Exchange Commission and that it was too early to determine or predict the outcome of the investigation. Ericsson disclosed in February that an internal investigation had found it may have made payments to the Islamic State militant group in Iraq — misconduct it said "started at least back in 2011."

— From news services