Unemployment insurance claims on the rise

137

The number of Americans filing for unemployment insurance rose last week, but held up well despite the Federal Reserve’s attempt to cool the job market by raising interest rates.

US jobless claims rose 12,000 to 248,000 for the week ending July 1, the Labor Department said Thursday.

The four-week average, which is less volatile than the weekly average, fell by 3,500 to 253,250.

Aid applications are considered representative of the number of layoffs in a given week.

For three weeks, from the end of May and the beginning of June, the number of applications remained above 260,000.

Still, that hike probably won’t be enough for Fed officials to decide not to raise its prime rate at their next meeting.

The US economy has added jobs at a breakneck pace since more than 20 million jobs were lost when the COVID-19 pandemic struck in the spring of 2020. Americans have enjoyed unusual job security as companies have been reluctant to lay off staff in a worker-friendly work environment.

US employers added a better-than-expected 339,000 jobs in May, surprising economists and painting a mostly rosy picture of the labor market, even as unemployment rose to a still-healthy 3.7%. Fed officials have said that the unemployment rate must exceed 4% to reduce inflation.

The June jobs report will be released on Friday.

Last week, the government reported that the US economy grew at an annual rate of 2% from January to March, much more than the previous estimate of 1.3%. That, combined with the still-strong job market, likely means Fed officials will go ahead with another rate hike before the end of the year as their battle against inflation continues.