Fewer Americans applied for unemployment benefits last week

WASHINGTON — Fewer Americans filed for jobless benefits last week, but the previous week’s number was revised significantly higher, with claims exceeding the 250,000 level in consecutive weeks for the first time in more than eight months.

Jobless claims for the week ending July 23 fell by 5,000 to 256,000 from 261,000 the previous week, the Labor Department reported Thursday. The number of claims for the week of July 16 was revised up by 10,000 from the previous estimate of 251,000.

First-time applications generally reflect layoffs.

The four-week average of claims, which smoothes out some of the week-to-week volatility, rose by 6,250 from the previous week to 249,500. That number is also at its highest level since November of last year.

The total number of Americans who collected unemployment benefits during the week ending July 16 fell by 25,000 from the previous week, to 1,359,000. That number has been near 50-year lows for months.

Earlier this month, the Labor Department reported that employers added 372,000 jobs in June, a surprisingly strong gain and similar to the pace of the previous two months. Economists had expected job growth to slow sharply last month given broader signs of economic weakness.

The unemployment rate stood at 3.6% for the fourth month in a row, matching a nearly 50-year low that was reached before the pandemic struck in early 2020.

In early July, the government reported that US employers posted fewer jobs in May amid signs the economy is weakening, though overall demand for workers remained strong. There are almost two job openings for every unemployed person.

Although the labor market is still considered strong, other indicators point to some weakness in the US economy. The government said on Thursday that the US economy shrank 0.9% in the second quarter, the second straight quarterly contraction.

Consumer prices continue to rise, up 9.1% in June compared to a year earlier, the biggest annual increase in four decades. In response, the Federal Reserve raised its main lending rate by another three-quarters of a point on Wednesday. That follows last month’s three-quarter point increase and a half-point increase in May.

Those higher rates have already pushed down home sales, made the prospect of buying a new car more onerous and pushed up credit card rates.

All of those factors paint a divergent and confusing picture of the post-pandemic economy: Inflation is hitting household budgets, forcing consumers to cut spending, and growth is weakening, raising fears that the economy may fall into recession.

Although the job market remains strong, Tesla, Netflix, Carvana, Redfin, and Coinbase have recently announced some high-profile layoffs.

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