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Number of Americans applying for jobless aid rises, but not enough to cause concern

August 10, 2023
in News
Number of Americans applying for jobless aid rises, but not enough to cause concern
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The number of Americans applying for jobless benefits jumped last week, but not enough to raise concern about the consistently strong U.S. labor market.

U.S. applications for unemployment benefits rose by 21,000 to 248,000 for the week ending August 5, from 227,000 the week before, the Labor Department reported Thursday. That’s the most in five weeks.

The four-week moving average of claims, a less volatile reading, ticked up by 2,750 to 228,250.

Jobless claim applications are viewed as broadly representative of the number of layoffs in a given week.

Applications for jobless aid reached a higher level above 260,000 for a few weeks this spring, causing some concern, but then retreated.

Troubling levels of inflation moved the Federal Reserve to raise interest rates at a breakneck pace for the past year-and-a-half: the central bank raised its benchmark rate 11 times to the current 5.4%, a 22-year high.

Part of the Fed’s reasoning was to cool the job market and bring down wages, which, in theory, suppresses price growth. Though inflation has come down significantly during that stretch, the job market has remained remarkably strong.

Last week, the Labor Department reported that U.S. employers added 187,000 jobs in July, fewer than expected, but still a healthy number. The unemployment rate dipped to 3.5%, close to a half-century low.

Also last week, the government reported that job openings fell below 9.6 million in June, the lowest in more than two years. However, the numbers remain unusually robust considering monthly job openings never topped 8 million before 2021.

Outside of a flurry of layoffs in the technology sector early this year, companies have mostly been retaining workers.

Many businesses struggled to replenish their workforces after cutting jobs during the pandemic, and much of the ongoing hiring likely reflects efforts by many firms to catch up to elevated levels of consumer demand that have emerged since the pandemic recession.

While the manufacturing, warehousing, and retail industries have slowed their hiring in recent months, they aren’t yet cutting jobs in large numbers. Economists say that given the difficulties in finding workers during the past two years, businesses will likely hold onto them as long as possible, even if the economy weakens.

Overall, 1.68 million people were collecting unemployment benefits the week that ended July 29, about 8,000 fewer than the previous week.

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Copyright for syndicated content belongs to the linked Source : ABC News – https://abcnews.go.com/Business/wireStory/number-americans-applying-jobless-aid-rises-cause-concern-102162850

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