Washington — More Americans applied for jobless benefits last week as the number of unemployed continues to rise modestly, although the labor market remains one of the strongest parts of the US economy.
The Labor Department reported Thursday that applications for jobless aid for the week ended July 30 rose to 260,000, up from 6,000 the previous week from 254,000. First time applications generally reflect layoffs.
The four-week average for claims, which also equalizes weekly volatility, also increased from the previous week to 254,750.
The total number of Americans collecting jobless benefits for the week ended July 23 rose by 48,000 to 1,416,000 from the previous week. The figure is close to a 50-year low for months.
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.
Job openings fell to 10.7 million in June from 11.3 million in May. Job openings, which never exceeded 8 million in a month prior to last year, were up from 11 million each month from December to May before dipping in June.
The Labor Department’s jobs report for July, due Friday, is expected to show that employers took on another 250,000 jobs in the past month, a healthy number in normal times but the lowest since December 2020. When the global economy was being ravaged by the pandemic.
Economists expect the unemployment rate to remain at 3.6% for the fifth straight month.
While the labor market is still considered strong, some high-profile layoffs have been announced recently by Tesla, Netflix, Carvana, Redfin, and Coinbase. Several other companies, especially 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, a steady second quarter contraction.
Consumer prices are still rising, up 9.1% in June from a year earlier, the biggest annual increase in four decades. In response, the Federal Reserve raised its prime lending rate by three-quarters of a single point last week. This follows three-quarters of June’s growth and another half-point increase in May.
Higher rates have already sent home sales down, making the prospect of buying a new car more cumbersome and driving up credit card rates.
All of those factors paint a different and confusing picture of a post-pandemic economy: inflation is sagging household budgets, forcing consumers to pull back on spending, and growth is weakening, There are growing fears that the economy could plunge into recession.