US jobless claims drop slightly, still hold near 8-month high

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US jobless claims drop slightly, still hold near 8-month high

The United States unemployment rate remains at a historic low of 3.6 percent even as inflation spikes and the economy slows.

Signage for a job fair is seen on 5th Avenue after the release of the jobs report in Manhattan, New York City, U.S.
US data such as high inflation, soaring consumer prices and slowing gross domestic product are increasingly indicting that millions of Americans are facing tough economic times [FIle: Andrew Kelly/Reuters]

Published On 28 Jul 202228 Jul 2022

Fewer Americans applied for unemployment insurance for the first time in four weeks, but the number is still the highest since November, suggesting that the economy may be slowing down.

According to the US Department of Labor, applications (PDF) for unemployment benefits for the week ending July 23 declined by 5,000 to 256,000 from the previous week’s 261,000. The number of claims for the week of July 16 was revised upward by 10,000 from the previous estimate of 251,000.


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The four-week average for claims, which smooths out some of the week-to-week volatility, rose by 6,250 from the previous week, to 249,500. That number is also at its highest level since November of last year.

For the week ending July 16, there were 1,359,000 Americans receiving unemployment benefits, a decrease of 25,000 from the previous week. For months, that number has been close to 50-year lows.

The Department of Labor earlier this month announced that companies added 372,000 jobs in June, a surprise increase and a rate comparable to the preceding two months. Given the more general indicators of economic deterioration, economists had anticipated that job growth would decline significantly last month.

For the fourth consecutive month, the unemployment rate stayed at 3.6 percent, matching a low that had not been seen in nearly 50 years.


US unemployment applications dip, hold near eight-month high

However, total demand for labour remains high. The US government earlier this month announced that firms posted fewer positions in May amid concerns that the economy was weakening. For every individual who is unemployed, there are currently almost two job vacancies.

And while the labour market appears robust, companies like Tesla, Netflix, Carvana, Redfin, Coinbase and Shopify have recently announced layoffs. Other firms have said they would slow hiring.

American shoppers’ sentiment has also taken a major hit in recent months. The Consumer Confidence Index fell for a third straight month to 95.7 from a downwardly revised 98.4 reading in June – the lowest reading since February 2021. Americans are being more cautious with their spending.

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