WASHINGTON (TBEN) – More Americans filed for unemployment benefits last week as the unemployment rate continues to rise modestly, though the job market remains one of the strongest components of the US economy.
Jobless aid applications for the week ending July 30 rose by 6,000 to 260,000 from 254,000 last week, the Labor Department reported Thursday. First job applications generally reflect layoffs.
The four-week average for claims, which evens out the weekly ups and downs, also rose from the previous week to 254,750.
The total number of Americans receiving unemployment benefits for the week ending July 23 increased by 48,000 from the previous week to 1,416,000. That figure has been near its 50-year low for months now.
On Tuesday, the Labor Department reported that US employers posted fewer job openings in June as the economy struggles with persistently high inflation and rising interest rates.
The number of vacancies fell from 11.3 million in May to a still high 10.7 million in June. The number of job openings, which never exceeded 8 million in a month before last year, was 11 million every month from December through May, before falling in June.
The Labor Department’s July jobs report, out Friday, is expected to show that employers took over an additional 250,000 jobs last month, which would be a healthy number in normal times but the lowest since December 2020, when the global economy was ravaged by the pandemic.
Economists expect the unemployment rate to remain at 3.6% for the fifth straight month.
While the job market is still considered strong, some high-profile layoffs were recently announced by Tesla, Netflix, Carvana, Redfin and Coinbase. A large number of other companies, especially in the tech sector, have announced a hiring freeze.
Other indicators point to some weakness in the US economy. The government said last week that the US economy contracted 0.9% in the second quarter, its second consecutive quarterly contraction.
Consumer prices are still rising, by 9.1% in June compared to a year earlier, the largest annual increase in four decades. In response, the Federal Reserve raised its key lending rate by another three-quarters point last week. This follows the rise of three quarters of points in June and another half point increase in May.
Higher rates have already tumbled home sales, made the prospect of buying a new car more difficult and pushed up credit card rates.
All of these factors paint a diverse and confusing picture of the post-pandemic economy: inflation is pushing household budgets to the brink, forcing consumers to pay back, and growth is weakening, raising fears that the economy could slip into recession. .