Unemployment Benefit Filings reach Highest Level in 8 Months
Is it a possible sign that the labor market is slowing down?
Unemployment benefit applications from Americans spiked last week to the highest levels in more than eight months. Many economists warn this can be the start of a weakening labor market which has been the last standing leg of the economy.
In the week ending with July 16th, applications rose by 7,000 to 251,000 from the previous week’s 244,000, according to the Labor Department. This is the largest spike since 2021 when November’s figures totaled 265,000. The expectation was set to be 242,000.
The current four-week average for claims rose by 4,500 from the previous week totaling 240,500. Those collection jobless benefits for the week ending July 9 rose by 51,000 from the previous week to 1,384,000. These figures are nearing 50-year lows.
The Labor Department reported employers adding 372,000 jobs in June and economists had expected job growth to eventually slow given the signs of a weakening economy. The unemployment rate however remained at 3.6% for the fourth straight month.
Earlier this month, the government reported that United States employers have advised that fewer jobs in May would be reported as the economy continued to decline and overall demand for workers remained strong. For every unemployed person, there are nearly two job openings.
Last week, the number of Americans applying for unemployment hit an all-time high for an 8-month span as the total number of those collecting fell. Inflation at the wholesale level also rose to 11.3%, according to the Labor Department’s reporting last week. The picture being painted is that of the post-pandemic economy. Inflation is running wild and consumers have pulled back on spending as growth weakens.
Though the labor market is still being considered strong, there have been some high-profile layoffs announced recently by Tesla, Netflix, Carvana, Redfin, and Coinbase.