US jobless claims rise to highest since November in holiday week
APPLICATIONS for US state unemployment insurance rose to the highest level since November during the week that included the Independence Day holiday on Jul 4 and as more companies announce job cuts.
Initial unemployment claims increased by 9,000 to 244,000 in the week ended Jul 9, Labor Department data showed on Thursday (Jul 14). The median estimate in a Bloomberg survey of economists called for 235,000 applications.
Continuing claims for state benefits fell to 1.33 million in the week ended Jul 2.
The rise in unemployment claims comes as more companies announce job cuts amid increasing fear of a US recession. While the labour market has so far held strong in the face of rising interest rates, the Federal Reserve may ratchet up its fight against decades-high inflation with even bigger hikes, which could curb demand for workers.
In recent weeks, companies such as Alphabet’s Google and Microsoft have said they will slow hiring in a time of global economic uncertainty. While many of the job-cut announcements have come from the tech sector, others in housing, cars and energy have also warned of letting workers go.
The jobless claims data, which can be choppy from week to week, tend to be especially volatile around holidays. The 4-week moving average, which smooths out such swings, rose by 3,250 to 235,750. It has been creeping higher.
The report follows Wednesday’s inflation data, which showed US consumer prices rose 9.1 per cent in the year till June to a fresh 40-year high. BLOOMBERG
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