Weekly jobless claims rose again last week in the United States and reached their highest level since November 2021, despite persistent difficulties for employers to find work. From July 10 to 16, 251,000 people applied for unemployment benefits, 7,000 more than the previous week, according to Labor Department data released Thursday. This is much more than the expectations of economists who expected a drop to 240,000.
In total, almost 1.4 million people received unemployment benefits during the week of July 3 to 9, 51,000 more in one week, according to data published a week late. However, this increase is not “significant”, according to economist Ian Shepherdson of Pantheon Macroeconomics, who points out that “the figures continue to be distorted” by the annual closures of production lines at car manufacturers, “which poses problems for seasonal adjustment as the timing and extent of closures vary from year to year.”
“The background trend will reappear when the distortions fade at the beginning of August”, he adds, estimating that there should then be only “a slight increase compared to the trend of 230,000 before the closures in the automotive sector, keeping the level of registrations very low in comparison to historical standards.
“Ease of labor market conditions”
Since the spring of 2021, employers, faced with labor shortages and mass resignations every month, have been hesitant to lay off workers, instead offering better pay terms to retain their employees and hire new employees. “The Fed’s rate hikes, aimed not only at reducing inflation but also rebalancing the supply and demand of workers, should lead to an easing of labor market conditions and a further increase in layoffs in the coming months.” “, says Rubeela Farooqi, chief economist at High Frequency Economics.
In fact, the US central bank has gradually raised its reference rates since March, to curb consumption and therefore inflation, which is at its highest level in 40 years.
Source: BFM TV
