US: Unemployment benefits applications generally indicate layoffs

By Al Mayadeen English
Source: Agencies
4 Aug 2022 22:24

The unemployment rate has increased slowly in the US as inflation reached 9.1%.

Inflation in the US reached 9.1%.

With the unemployment rate slowly increasing in the US, more Americans applied for unemployment benefits last week.

The Labor Department said on Thursday the number of applications for unemployment benefits increased by 6,000 to 260,000 for the week ending July 30 from 254,000 the previous week. The number of applications for new unemployment benefits applications generally indicates layoffs.

The number of jobless benefits claims increased from the prior week to 254,750 on a four-week average, which usually balances out weekly fluctuations.

The overall number of Americans claiming unemployment benefits increased by 48,000 for the week ending July 23 from 1,416,000 the week prior. For months, that number has been close to 50-year lows.

The Labor Department announced on Tuesday that fewer job opportunities were posted by American firms in June as the economy struggled to deal with stubbornly high inflation and increasing interest rates.

According to a Morning Consult poll, as #recession fears grow among #Americans, 63% of respondents said they are very or somewhat concerned about being able to afford gas/fuel in the future.#Inflation pic.twitter.com/21H03vKyRH
— Al Mayadeen English (@MayadeenEnglish) July 29, 2022

From 11.3 million in May, job vacancies decreased to 10.7 million in June. Prior to last year, there were never more than 8 million job opportunities in a single month. From December through May, however, the number had not decreased below 11 million until June.

The Labor Department's July employment report, which is scheduled to be released on Friday, is anticipated to reveal that businesses added 250,000 new positions in July. While this would be good in normal circumstances, however, in the current situation, it would be the lowest number since December 2020.

For the fifth consecutive month, economists anticipate that the unemployment rate will remain at 3.6%.

Even though the labor market is currently regarded as being robust, notable companies including Tesla, Netflix, Carvana, Redfin, and Coinbase have lately announced layoffs. Many other businesses, especially in the computer industry, have issued hiring curbs.

The US economy appears to be weaker than previously thought, according to other indications. The government reported last week that the second quarter's 0.9% decline in the US GDP was the second consecutive quarterly decline.

Consumer prices continue to surge, with a 9.1% inflation rate when compared with last year's prices. This increase constitutes the highest annual increase in four decades. The Federal Reserve responded by increasing its key borrowing rate by three-quarters of a percentage point last week. This comes after a three-quarter point jump in June and an additional half-point increase in May.