US weekly jobless claims at highest point in nearly 8 months
Jul 13, 2022, 5:53 PM | Updated: Jul 14, 2022, 6:09 am
(AP Photo/Rogelio V. Solis)
WASHINGTON (AP) — The number of Americans applying for unemployment benefits last week hit its highest level in nearly 8 months, but the total number of those collecting benefits fell.
Applications for jobless aid for the week ending July 9 rose by 9,000 to 244,000, up from the previous week’s 235,000, the Labor Department reported Thursday. First-time applications generally reflect layoffs. Analysts had expected the number to remain flat from the previous week.
The four-week average for claims, which evens out some of the week-to-week volatility, rose by 3,250 from the previous week, to 235,750.
The total number of Americans collecting jobless benefits for the week ending July 2 fell by 41,000 from the previous week, to 1,331,000. That figure has hovered near 50-year lows for months.
Last week, the Labor Department reported that employers added 372,000 jobs in June, a surprisingly robust gain and in line with the pace of the previous two months. Economists had expected job growth to slow sharply last month given the broader signs of economic weakness.
The unemployment rate remained 3.6% for a fourth straight month, matching a near-50-year low that was reached before the pandemic struck in early 2020.
The government also reported last week that U.S. employers advertised fewer jobs in May amid signs that the economy is weakening, though the overall demand for workers remained strong. There are nearly two job openings for every unemployed person.
On Wednesday, the government said that consumer prices soared 9.1% compared with a year earlier, the biggest yearly increase since 1981. From May to June, prices rose 1.3%, another huge increase, after prices had surged 1% from April to May.
The Labor Department reported Thursday that inflation at the wholesale level climbed 11.3% in June from a year earlier.
All of those figures reflect the unusual nature of the post-pandemic economy: Inflation is hammering household budgets, forcing consumers to pull back on spending, and growth is weakening, heightening fears the economy could fall into recession.
In an effort to combat the worst inflation in more than four decades, the Federal Reserve raised rates by a half-point in May and another rare three-quarter point increase last month. Most economists expect the Federal Reserve to jack up its borrowing rate another half-to-three-quarters of a point when it meets later this month.
Besides carving up the average American’s income, those rate increases also raise borrowing costs, rents and mortgage payments for corporations, which cuts into profits. Investors have responded by bailing from the equity market and piling into the bond market. Since the beginning of the year, the S&P 500 has declined about 20%, the Dow Jones industrials have fallen about 15% and the Nasdaq is down more than 28%.
Though the labor market is still strong, there have been some high-profile layoffs announced recently by Tesla, Netflix, Carvana, Redfin and Coinbase.
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