WASHINGTON, (Reuters) – The average number of Americans who file new unemployment claims last week increased by more than anticipated but remained consistent with a tight labor force.

The Labor Department reported that initial claims for state unemployment benefits increased 27,000 to 229,000 in the week ending June 4. Reuters polled economists and forecast that 210,000 applicants would apply for state unemployment benefits in the week ending June 4.

This data also included Memorial Day. The seasonally factors (the model used by the government to eliminate seasonal fluctuations in data) normally predict a decline in applications around holidays.

However, there is limited scope for large decreases in unadjusted claims that are already very low.

Lou Crandall (LON) chief economist, Wrightson ICAP said that “We expect some or all the week’s increase to be reversed by next Thursday’s Report as the holiday-week Effect fades.”

The range of claims has been tight since plummeting to an all-time low of 166,000 for March, a 52-year period. They are now at an all-time low of 6.137 millions in April 2020, a new record.

As it fights rising inflation, the Federal Reserve tightens monetary policy in an effort to reduce demand. Last Friday, the government announced that nonfarm payrolls rose by 390,000. The unemployment rate remained at 3.6% for the third consecutive month.

Companies have reported that they are considering laying off employees or freezing their hiring in preparation of the next recession. However, labor demand remains high with over 11.4 million jobs available at April’s end.

Next Wednesday, the Fed will likely raise its policy rate 50 basis points. In July, a half-point increase is expected.

Since March, the U.S. central banks has raised its overnight rate 75 basis points. According to the claims report, the total number of beneficiaries after the first week of assistance was unchanged at 1.306 millions for the week ended May 28.