Number of Americans Filing for Unemployment Rises Again
Recent reports indicate an increase in unemployment benefits claims in the U.S., with jobless claims rising by 4,000 to reach a total of 232,000 for the week ending August 17. The four-week average also saw a slight decrease. As of August 10, approximately 1.86 million Americans were receiving unemployment benefits, reflecting a rise in claims since May. Analysts have noted that this trend aligns with the impact of high interest rates on the job market, which the Federal Reserve has been actively managing to combat inflation. Despite a decrease in inflation rates, consumer prices remain significantly higher than pre-2021 levels, leading to voter concern ahead of the upcoming presidential elections. The labor market also showed slower job growth, with only 114,000 jobs added in July, which was notably below earlier averages. Further revisions from the Labor Department indicate a reduction in job growth over the past year, suggesting a softening of the labor market and possible upcoming rate cuts from the Federal Reserve.
The number of Americans filing for unemployment benefits rose last week.
Jobless claims rose by 4,000 to 232,000 for the week of August 17th, the Labor Department reported Thursday. The four-week average of claims, which evens out some of the weekly gyrations, ticked down by 750 to 236,000.
For the week ending August 10th, 1.86 million Americans were collecting jobless benefits, 4,000 more than the week before.
From January through May, claims averaged 213,000 a week. But they started rising in May, hitting 250,000 in late July and adding to evidence that high interest rates are taking a toll on the U.S. job market.
The Federal Reserve, fighting inflation that hit a four-decade just over two years ago, raised its benchmark interest rate 11 times in 2022 and 2023, taking it to a 23-year high. Inflation has come down steadily — from more than 9 percent in June 2022 to a three-year low of 2.9 percent last month.
The economy is weighing heavily on voters as they prepare for November’s presidential election. Despite decelerating inflation, Americans are still exasperated that consumer prices are 19 percent higher than they were before inflation started to take off in 2021. Many blame President Joe Biden, though it is unclear whether they will hold Vice President Kamala Harris responsible as she seeks the presidency.
Lately, higher rates have finally seemed to be taking a toll. Employers added just 114,000 jobs in July, well below the January-June monthly average of nearly 218,000. The unemployment rate rose for the fourth straight month in July.
Earlier this week, the Labor Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total supports evidence that the job market has been steadily slowing and likely reinforces the Federal Reserve’s plan to start cutting interest rates soon.
The Labor Department estimated that job growth averaged 174,000 a month in the year that ended in March — a decline of 68,000 a month from the 242,000 that were initially reported. The revisions released Wednesday were preliminary, with final numbers to be issued in February next year.
On top of that, monthly job openings have fallen steadily since peaking at a record 12.2 million in March 2022. They were down to 8.2 million in June.
As signs of an economic slowdown accumulate and inflation continues to drift down toward its 2 percent target, the Fed is expected to start cutting rates at its next meeting in September.
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