The number of Americans who applied for unemployment benefits increased last week to the highest level since November, despite the fact that the U.S. job market remains strong.
WASHINGTON (AP) — The U.S. The number of Americans who applied for unemployment benefits increased last week to the highest level since November, even thougheven though the U.S. job market remains strong.
The Labor Department reported Thursday that applications for unemployment benefits increased by 14,000 to 262,000, bringing the total to 262,000 in five of the last six weeks.
The four-week average of claims, which smooths out weekly fluctuations, increased by 4,500 to 252,000, the highest level since November.
Unemployment applications are a proxy for layoffs and are frequently regarded as a leading indicator of where the job market is headed.
In the face of rising interest rates and slowing economic growth, hiring in the United States has been remarkably strong and resilient this year.
The Labor Department reported last week that employers in the United States added 528,000 jobs in February, more than double what economists predicted. In July, the unemployment rate fell to 3.5%, matching a 50-year low reached just before the coronavirus pandemic hit the US economy in early 2020.
The United States recovered from 2020’s COVID-19 recession with unexpected vigor, leaving businesses scrambling to find enough workers.
However, the US economy is facing difficulties. Consumer prices have been surging, rising 8.5% year on year in July, slightly lower than the 40-year high of 9.1% in June. The Federal Reserve has raised its benchmark short-term interest rate four times this year to combat inflation.
Higher borrowing costs have had an impact. One rule of thumb for the onset of a recession is that the economy contracted in the first half of the year. However, the job market’s strength is incompatible with an economic downturn.
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