US jobless claims rise by 14,000 to 262,000

WASHINGTON — The number of Americans signing up for jobless benefits rose last week to the highest level since November, though the US labor market continues to show signs of strength.

Claims for jobless aid increased by 14,000 to 262,000 and are now up five in the past six weeks, the Labor Department reported Thursday.

The four-week average of claims, smoothing out weekly ups and downs, rose by 4,500 to 252,000, also the highest since November.

The number of Americans collecting traditional unemployment benefits rose by 8,000 in the week ending July 30 to 1.43 million, the highest level since early April.

Jobless claims are an indicator of layoffs and are often seen as an early indicator of where the labor market is headed.

So far this year, US hiring has been remarkably strong and resilient in the face of rising interest rates and weak economic growth.

The Labor Department reported last week that US employers added 528,000 jobs last month, more than double what forecasters expected. The jobless rate fell to 3.5% in July, matching a 50-year low hit just before the coronavirus pandemic hit the US economy in early 2020.

The United States rebounded with unexpected force from the 2020 COVID-19 recession, leaving businesses scrambling to find enough workers.

But the US economy faces challenges. Consumer prices have been on the rise, rising 8.5% in July from a year earlier, slightly below June’s 40-year high of 9.1%. To combat inflation, the Federal Reserve has raised its benchmark short-term interest rate four times this year.

Higher borrowing costs have taken a toll. The economy contracted in the first half of the year, a general rule of thumb for the start of a recession. But the strength of the labor market is inconsistent with an economic downturn.

“Demand for labor remains quite strong,” economists Thomas Simons and Aneta Markowska of Jefferies wrote on Thursday. “The modest uptick in claims suggests churn may be rising at weaker companies struggling with slowing growth.”

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