More Americans filed for jobless benefits last week as the number of unemployed continues to rise modestly, though the labor market remains one of the strongest parts of the US economy.
Jobless claims for the week ending July 30 rose by 6,000 to 260,000 from 254,000 the previous week, the Labor Department reported Thursday. First-time applications generally reflect layoffs.
The four-week average of claims, which levels out the weekly highs and lows, also increased from the previous week to 254,750.
The total number of Americans who collected unemployment benefits during the week ending July 23 increased by 48,000 from the previous week, to 1,416,000. That number has been near 50-year lows for months.
On Tuesday, the Labor Department reported that US employers posted fewer job openings in June as the economy grapples with persistently high inflation and rising interest rates.
Job openings fell to 10.7 million in June, which is still high, from 11.3 million in May. Job openings, which never topped 8 million in a month before last year, topped 11 million each month from December through May before falling in June.
The Labor Department’s jobs report for July, due out Friday, is expected to show employers added another 250,000 jobs last month, which would be a healthy number in normal times but would be the lowest since December 2020. , when the world economy was being devastated by the pandemic.
Economists expect the unemployment rate to remain at 3.6% for the fifth consecutive month.
Although the job market is still considered strong, Tesla, Netflix, Carvana, Redfin, and Coinbase have recently announced some high-profile layoffs. 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 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 last week. That follows a three-quarter increase in June and another half-point increase in May.
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.