Unemployment insurance claims climb again, approaching 8-month high
The number of Americans filing unemployment benefits rose slightly last week, approaching the highest level of the year – the latest sign that the historically tight labor market is starting to calm down.
Figures released Thursday by the Labor Department show claims for the week ended July 30 rose to 260,000 from the downwardly revised 254,000 recorded a week earlier. The figure is higher than the 2019 pre-pandemic average of 218,000 claims and narrowly missed the eight-month peak of 261,000 recorded in mid-July.
Continuing claims, or the number of Americans who consecutively receive unemployment assistance, rose slightly to 1.416 million for the week ended July 23, up 48,000 from the revised level the previous week. A year ago, nearly 12.96 million Americans were receiving unemployment benefits.
For months, the labor market has been one of the few bright spots in the economy, with the June jobs report showing the jobless rate remained at 3.6% – near an all-time low – for the fourth consecutive month.
IS THE UNITED STATES ENTERING A RECESSION?
However, there are signs the labor market is beginning to weaken, with a plethora of companies including Alphabet’s Google, Walmart, Apple, Meta and Microsoft announcing hiring freezes or layoffs in recent years. weeks.
“Initial jobless claims have risen again over the past week on an upward trajectory with no rapid end in sight,” said Robert Frick, business economist at Navy Federal Credit Union. “Major companies, including the nation’s largest employer, Walmart, are announcing layoffs as the economy cools.”
HOW HOUSING IS FEEDING INCREASING INFLATION
There are growing fears that the U.S. economy is on the verge of a recession – or already in a recession – due to the The Federal Reserve’s War on Inflation. The central bank is raising interest rates at the fastest pace in decades as it rushes to cool consumer prices, which jumped 9.1% in June – the biggest increase in a year on the other since 1981.
Policymakers approved another 75 basis point rate hike – triple the usual size – at their meeting last week and have since signaled they are “far from” ending this tightening cycle, despite signs of a slowing economy.
The jobless claims data comes a day before the Labor Department releases its more closely watched July jobs report, which is expected to show the economy added 250,000 jobs last month. The jobless rate, meanwhile, likely held steady at 3.6%, according to projections from economists at Refinitiv.
In other economic news, the Commerce Department reported Thursday that the U.S. trade deficit narrowed 6.2% in June to $79.6 billion — the result of higher shipments of energy products and supplies. decline in consumer demand for imports. It is the first time since 2021 that the deficit has fallen below $80 billion.
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