The number of people filing for jobless benefits in the US rose by 72,504 last week, reaching an eight-month high. This is a warning to investors that the US economy is losing steam, with housing activity buckled under higher interest rates and business investment shifting downward amid recession fears. A spike in weekly jobless claims could lead to an even deeper recession, and it is possible that some workers will have to cut back on their spending or look for another job.
The number of Americans applying for unemployment benefits climbed last week, but the number of people collecting these benefits fell slightly. Last week, Americans filed 244,000 new jobless claims, an eight-month high. Analysts had expected the number of new jobless claims to remain flat, but the figures showed a rise in the past two weeks. The number of first-time claims, which generally reflect layoffs, rose by 9,000 from two weeks ago. Continuing claims for unemployment insurance fell by 41,000 to 1.3 million last week.
The news was also accompanied by a slump in stock market futures. Government bonds also edged lower. The Department of Labor’s survey of weekly jobless claims is seasonally adjusted, so this data may not signal a pending recession. However, a drop in claims is still a good sign for the jobs market, as there are few unemployed individuals on the rolls.
In the previous week, the number of Americans collecting unemployment benefits climbed by 41,000. The number of people collecting unemployment benefits increased to a six-month high, while the broader measure of unemployment fell to a record low. However, this data is not alarming, as it is below the level economists consider a potentially dangerous level. However, layoffs in the interest-sensitive manufacturing and housing sectors have been reported in recent weeks. On the bright side, hiring continues to be strong, with 372,000 new jobs being created in June. The broader measure of unemployment remained at a near-50-year low.
The labor department also reported that US employers advertised fewer jobs in May, but overall demand for workers is still high. As a result, there are almost two job openings for every unemployed person. Meanwhile, consumer prices rose 9.1% from a year ago and jumped 1.3% from April to May. Meanwhile, wholesale inflation jumped 11.3% over the same period.