WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell last week, signaling continued resilience in the U.S. labor market.
The Labor Department reported Thursday that jobless claims decreased by 5,000 to 238,000 from a 10-month high of 243,000 the previous week. The four-week average of claims, which smooths out weekly fluctuations, rose by 5,500 to 232,750, the highest since September.
Despite the recent increase, weekly unemployment claims — a proxy for layoffs — remain low by historical standards, indicating that most Americans have strong job security. However, after staying mostly below 220,000 this year, weekly claims have recently edged up.
“Layoffs are still low overall, suggesting businesses remain reluctant to reduce headcount in large numbers,’’ said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “However, there has been a gradual increase in recent weeks that merits watching for signals about a more material weakening in demand for workers going forward.’’
Nearly 1.83 million people were collecting unemployment benefits the week of June 8, an increase of 15,000 from the previous week and the seventh consecutive weekly rise.
The U.S. economy and job market have shown remarkable resilience despite high interest rates. Employers are adding an average of 248,000 jobs per month this year, and unemployment remains low at 4%.
Nevertheless, there are signs that the economy is slowing, potentially indicating that higher borrowing costs are starting to have an impact. For instance, the Commerce Department reported on Tuesday that retail sales barely grew last month.
The Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023, bringing it to a 23-year high to combat rising inflation. While inflation has decreased from its mid-2022 peak of 9.1%, it remains above the Fed’s 2% target. Last week, Fed policymakers announced they have scaled back their intention to cut the rate three times this year, now anticipating only one rate cut.
