More Americans filed for unemployment benefits last week as the number of unemployed continues to rise slowly, but the labor market remains one of the strongest parts of the US economy.
Applications for unemployment assistance for the week ending July 30 rose to 260,000 from 254,000 the week before, up from 6,000 to 260,000, the Labor Department reported Thursday. First-time applications usually reflect layoffs.
The four-week average of claims, which smoothes out the weekly ups and downs, also increased from the previous week to 254,750.
The total number of Americans receiving unemployment benefits in the week ending July 23 increased by 48,000 from the previous week to 1,416,000. The figure has been close to its lowest level in 50 years for several months.
The Labor Department reported on Tuesday that the number of job openings posted by U.S. employers fell in June.
Job openings fell from 11.3 million in May to a still high 10.7 million in June. Until last year, he had never exceeded eight million job openings in a single month.
The Labor Department’s July jobs report, due out Friday, is expected to show employers committed to a further 250,000 jobs last month. devastated by the pandemic.
Economists expect the unemployment rate to remain at 3.6% for the fifth straight month.
While the labor market is still believed to be strong, there have been several high-profile layoffs recently announced by Tesla, Netflix, Carvana, Redfin and Coinbase. Many other companies, especially in the technology sector, have announced hiring freezes.
Other indicators point to weakness in the US economy. The government said last week that the US economy contracted he 0.9% in the second quarter. This is his second straight quarter of contraction.
Consumer prices are still soaring, rising 9.1% year-on-year in June, the biggest annual gain in 40 years. In response, the Federal Reserve raised its main borrowing rate by another three-quarters of a percentage point last week. This follows his three-quarter point increase in June and another half-point increase in May.
Rising interest rates are already plummeting home sales, increasing the burden of new car purchases and pushing up credit card rates.
All of these factors paint a diverse and confusing picture of the post-pandemic economy. Inflation is hurting household budgets, forcing consumers to cut back on spending, slowing growth and raising fears of an economy slipping into recession.