Fewer Americans filed for unemployment benefits last week, but applications remained at recently elevated, though not troubling levels.
Jobless claims for the week ending July 20 fell by 10,000 to 235,000 from 245,000 the previous week, the Labor Department reported Thursday. It’s the ninth straight week claims came in above 220,000. Before that stretch, claims had been below that number in all but three weeks so far in 2024.
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Weekly unemployment claims are widely considered as representative of layoffs, and though they have been slightly higher the past couple of months, they remain at historically healthy levels.
The four-week average of claims, which evens out some of the week-to-week volatility, rose by 250 to 235,250.
The total number of Americans collecting unemployment benefits fell for the second time in three weeks. About 1.85 million Americans were collecting jobless benefits for the week of July 13, around 9,000 fewer than the previous week. However, the four-week average for continuing claims rose to 1,853,500, the highest level since December of 2021.
Continuing claims have been on the rise in recent months, suggesting that some Americans receiving unemployment benefits are finding it more challenging to land jobs.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an attempt to extinguish the four-decade high inflation that shook the economy after it rebounded from the COVID-19 recession of 2020. The Fed’s intention was to cool off a red-hot labor market and slow wage growth, which it says can fuel inflation.
Few analysts expect the Fed to cut rates at its meeting later this month, but most are betting on a cut in September.
There have been job cuts across a range of sectors in recent months, from the agricultural manufacturer Deere, to media outlets like CNN, and elsewhere.
Strong consumer demand and a resilient labor market has helped to avert a recession that many economists forecast during the extended flurry of rate hikes. As inflation continues to ease, the Fed’s goal of a soft-landing — bringing down inflation without causing a recession and mass layoffs — appears within reach.
While the labor market remains historically healthy, recent government data suggest some weakening.
The unemployment rate ticked up to 4.1% in June, despite the fact that America’s employers added 206,000 jobs.
Job postings in May rose slightly to 8.1 million, however, April’s figure was revised lower to 7.9 million, the first reading below 8 million since February 2021.