WASHINGTON– More Americans applied for unemployment benefits last week as the number of unemployed continues to rise slightly, although the labor market remains one of the strongest sectors of the US economy.
Claims for unemployment assistance for the week ending July 30 rose by 6,000 to 260,000 from 254,000 the previous week, the Labor Department reported Thursday. The first requests generally reflect layoffs.
The four-week average of claims, which evens out weekly highs and lows, also rose from the previous week, to 254,750.
The total number of Americans collecting unemployment benefits for the week ending July 23 rose by 48,000 from the previous week, to 1,416,000. That figure has been near 50-year lows for months .
On Tuesday, the Labor Department reported that U.S. employers posted fewer job openings in June as the economy faced persistently high inflation and rising interest rates.
Job vacancies fell to a still high 10.7 million in June from 11.3 million in May. Job postings, which never exceeded 8 million in a month before last year, had exceeded 11 million each month from December to May before plunging in June.
The Labor Department’s July jobs report, due out on Friday, is expected to show employers added 250,000 more jobs last month, which would be a healthy number in normal times but would be the lowest since December 2020. , when the global economy was being ravaged by the pandemic.
Economists expect the jobless rate to stay at 3.6% for the fifth month in a row.
Although the labor market is still considered strong, high profile layoffs have recently been announced by Tesla, Netflix, Carvana, Redfin and Coinbase. A host of other companies, particularly in the tech sector, have announced hiring freezes.
Other indicators point to some weakness in the US economy. The government said last week that the US economy shrank 0.9% in the second quarter, the second consecutive quarterly contraction.
Consumer prices continue to soar, up 9.1% in June from a year earlier, the largest annual increase in four decades. In response, the Federal Reserve raised its main borrowing rate an additional three-quarters of a point last week. This follows June’s three-quarter point rise and another half-point increase in May.
The higher rates have already dented home sales, made the prospect of buying a new car more onerous and pushed up credit card rates.
All of these factors paint a divergent and confusing picture of the post-pandemic economy: inflation hammers household budgets, forcing consumers to cut spending, and growth weakens, heightening fears that the economy does not fall into recession.