The number of Americans filing new claims for unemployment benefits rose more than expected last week, but there was no major change in the labor market and data is typically noisy in July because of summer vacations and temporary factory closures.
Initial claims for state unemployment benefits rose 20,000 to a seasonally adjusted 243,000 in the week ended July 13, the Labor Department reported on Thursday. Economists polled by Reuters had forecast 230,000 claims.
Orders fell last week, moving further away from the 10-month high hit in early June.
Part of that decline was attributed to difficulties adjusting data for holidays such as Independence Day. Also, automakers typically close their assembly plants after July 4 to prepare new models.
However, the closing schedules are different for each manufacturer, which can distort the model the government uses to smooth out the data based on seasonal fluctuations. Last year, claims for the subsidy rose in July through the first half of August, before reversing their trend in early September.
Ignoring volatility, the labor market is cooling as Fed rate hikes in 2022 and 2023 dampen demand. In June, the unemployment rate hit its highest level in two and a half years (4.1%).
The Fed’s Beige Book showed yesterday that “employment increased at a modest pace” in early July, but noted a decline in manufacturing employment.
He also said that supply had improved and that “labour turnover was lower, which reduced the demand for new workers,” adding that companies “in several districts hope to be more selective when hiring and not fill all vacant positions.”
The claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls portion of the July employment report. Nonfarm payrolls increased by 206,000 jobs in June.
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