The number of Americans filing new claims for jobless benefits rose for the second week in a row , signaling a further weakening in the labor market even though conditions are still tight, as the Federal Reserve (Fed) tries to cut demand to control inflation.
Initial claims for state jobless benefits rose by 14,000 seasonally adjusted for the week ending Aug. 6 to reach 262,000, the Labor Department said Thursday. Economists polled by Reuters had forecast 263,000 claims for the latest week.
That’s still below the 270,000-300,000 range that economists say would indicate a material slowdown in the labor market.
The number of people receiving benefits after an initial week of help rose by 8,000 to 1.428 million during the week ending July 30. The so-called continuous claims are an indicator of hiring.
The world’s largest economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending falling. The second consecutive quarterly drop in Gross Domestic Product (GDP) was largely due to a more moderate pace of inventory builds by businesses, as overall job earnings have remained strong.
The economy added 528,000 jobs, a very robust figure that beat estimates in July, the unemployment rate fell back to its lowest level since before the pandemic and wage gains surprised to the upside, the Labor Department announced on Thursday. last Friday, in a monthly report that makes it difficult for the Fed to balance the economy soon.
There were 10.7 million job openings at the end of June, with 1.8 openings for every unemployed worker.
Last month, the Fed raised its policy rate by another three-quarters of a percentage point as part of its effort to quell high inflation. It has raised that rate by 225 basis points since March.