The number of Americans who filed new applications for unemployment benefits rose last week, pointing to easing labor market conditions.
Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 238,000 in the week ended June 29, the Labor Department reported Wednesday. The report was released a day early because of the Independence Day holiday on Thursday.
Economists polled by Reuters had forecast 235,000 applications in the latest week.
Applications have been at the high end of their range of 194,000 to 243,000 this year, partly due to a rise in layoffs as higher interest rates curb demand, as well as difficulties in adjusting the data for seasonal fluctuations during the holidays.
Volatility could persist after the July 4 holiday. car manufacturers Assembly plants typically shut down in the summer, but the timing is uncertain.
The labor market continues to cool, with the government reporting Tuesday that there were 1.22 job openings for every unemployed person in May. The job openings-to-unemployment ratio is close to its 2019 average of 1.19.
Federal Reserve Chairman Jerome Powell said Tuesday that the economy was back on a “disinflationary path” but that policymakers needed more data before cutting rates.
Financial markets remain optimistic that the US central bank could begin its easing cycle in September.
The Federal Reserve has kept its benchmark overnight interest rate at the current range of 5.25%-5.50% since July last year. It has raised its policy rate by 525 basis points from 2022 to stem inflation.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose by 26,000 to a seasonally adjusted 1.858 million during the week ended June 22, the highest level since late November 2021, the claims report showed.
The so-called continuing claims data has been boosted by a policy change in Minnesota that took effect last year that allows non-teaching education staff to file for unemployment benefits during the summer holidays.
This increase is expected to disappear with the reopening of the school year in the fall.
According to a separate report released Wednesday by outplacement firm Challenger, Gray & Christmas, US companies announced 48,786 job cuts in June, 23.6 percent fewer than in May. However, planned layoffs were 19.8 percent higher than in June last year.
According to a Reuters poll of economists, the government is expected to report on Friday that nonfarm payrolls rose by 190,000 jobs in June, after rising by 272,000 in May. The unemployment rate is expected to remain unchanged at 4.0 percent.
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