Jobless claims remained near a nine-month high, at 260,000 unemployment applications, showing the US labor market is softening as inflation continues to persist and the Fed has been instituting record inflation rate hikes to slow the economy. Initial jobless claims were up by 6,000 from a revised 254,000 the prior week.
In a poll by the Wall Street Journal, economists predicted initial jobless claims would total 260,000 in the week ending July 30.
New filings fell as low as 166,000 in March, which was the second lowest reading on record, but then have crept up since then as the economy cooled off. In the tech sector, companies have even been engaging in layoffs.
The four-week average, which averages out random jumps and dips, rose to 254,750, a level not seen since last November.
Many companies are still hiring, and report they cannot find enough workers to fill all of their open jobs. At this point the strong jobs market is the primary factor which economists cite as pointing against the economy being in recession, as the economy ticks off almost every other metric as recessionary.
Most of the increases in jobless claims were focused in Connecticut, where there were more than 7,000 new filings. The state modernized its unemployment system recently to both make it more efficient and better detect fraud.
Oklahoma was the other main state to show a large increase. New claims were down in Massachusetts and Kentucky, while most other states remained roughly flat.
Out of 53 states and territories reporting, 21 showed increases and 32 measured declines.
The number of claimants already receiving unemployment benefits was up by 48,000 to 1.42 millions. These continuing claims, while close to a 50 year low, are at the highest level since April.
Money market economist Thomas Simons of Jefferies LLC said, “Demand for labor remains quite strong. The modest pickup in claims suggests that turnover may be increasing in weaker firms that are struggling with slowing growth. The relative stability of continuing claims suggests that workers who are let go are still having a relatively easy time finding a new job.”
