<mediadc-video-embed data-state="{"cms.site.owner":{"_ref":"00000161-3486-d333-a9e9-76c6fbf30000","_type":"00000161-3461-dd66-ab67-fd6b93390000"},"cms.content.publishDate":1657136796912,"cms.content.publishUser":{"_ref":"00000168-ed7d-d9d9-a9ec-ff7daffb0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"cms.content.updateDate":1657136796912,"cms.content.updateUser":{"_ref":"00000168-ed7d-d9d9-a9ec-ff7daffb0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"rawHtml":"
var _bp = _bp||[]; _bp.push({ "div": "Brid_57128125", "obj": {"id":"27789","width":"16","height":"9","video":"1047014"} }); ","_id":"00000181-d50c-df99-abbb-d5fecd300000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video EmbedThe number of new applications for unemployment benefits increased by 4,000 last week to 235,000, the highest in months.
Last week marked the highest number of weekly claims since January, a sign that the labor market may be facing some turbulence, although the figure is still quite low historically speaking.
JOB OPENINGS FALL FOR SECOND STRAIGHT MONTH
The level of weekly jobless claims, reported Thursday by the Department of Labor, indicates that layoffs continue to be infrequent as employers work to hold on to employees, fearful of having to find replacements.
Weekly claims began declining after new cases of COVID-19 peaked in mid-January and have hovered at the low levels they are at now since mid-February.
Around this time in July of 2021, new claims were averaging over 400,000 per week. The lowest number of recent jobless claims was the 166,000 tallied in mid-March. That represents the lowest number of new weekly claims since 1968.
“While we think the risk is for further increases in claims as economic growth slows, we don’t anticipate a sharp rise in new claims,” said economists from Oxford Economics.
Another sign of tightness in the labor market came on Wednesday when the Bureau of Labor Statistics released a report that showed there is still a high supply of job openings across all sectors of the economy — 11.3 million total.
Layoffs were at 1.4 million, well below the pre-pandemic rates of about 1.7 million to 1.9 million a month, which shows employers are still quite desperate to hold on to workers in the tight labor market.
Inflation has been the biggest economic detriment this year, with consumer prices increasing by a blistering 8.6% annually for the month of May. In order to tamp down prices, the Federal Reserve is working to raise interest rates and slow down demand, a move that could lead to a recession.
The Fed has hiked its interest rate target three times this year, although two of those hikes were more aggressive than the typical rate increases of a quarter of a percentage point.
Last month, the central bank announced it would hike its interest rate target by three-quarters of a percentage point, to a range of 1.5% to 1.75%. The move was akin to three rate hikes at once, the first time it has taken such an aggressive upward move since 1994.
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Fed Chairman Jerome Powell said during a recent panel that moving the economy through the rate-hiking cycle without inducing a recession will be “quite challenging.”
“We think that there are pathways for us to achieve the path back to 2% inflation while still retaining a strong labor market. We believe we can do that,” Powell said, adding, “There’s no guarantee that we can do that.”
