Fewer Americans are filing for unemployment insurance for the first time in four weeks, but the number is still the highest since November, suggesting the economy may be slowing.
According to the United States Department of Labor, the application (PDF) Unemployment benefits for the week ended July 23 fell from 5,000 to 256,000 from 261,000 the previous week. The number of claims for the week of July 16 was revised upwards by 10,000 from the previous estimate of 251,000.
The four-week average for claims, which helped smooth some of the weekly volatility, rose 6,250 from the previous week, to 249,500. That number is also at its highest level since last November.
For the week ending July 16, 1,359,000 Americans received unemployment benefits, down 25,000 from the previous week. For months, that number was close to Lowest level in 50 years.
The Labor Department announced earlier this month that companies added 372,000 jobs in June, an unexpected increase and the same rate as two months earlier. With more general indicators of a recession, economists had predicted that job growth would slow significantly last month.
For the fourth straight month, the unemployment rate stood at 3.6 percent, matching a low not seen in nearly 50 years.
However, aggregate demand for labor remains high. The US government earlier this month announced that companies had applied for fewer positions in May due to concerns that The economy is weakening. For every unemployed individual, there are almost two vacancies.
And while the labor market looks strong, companies like Tesla, Netflix, Carvana, Redfin, Coinbase, and Shopify recently announced layoffs. Other companies said they would slow hiring.
The psychology of American shoppers has also get a big hit in recent months. The Consumer Confidence Index fell for a third straight month to 95.7 from a downward-adjusted 98.4 in June – the lowest level since February 2021. Americans are more cautious with spending. their spending.
There are other indicators pointing to a persistent slowdown in the US economy. On Thursday, the Commerce Department said that US economy shrinks by 0.9% in the second quarter, the second consecutive quarter of contraction. Two consecutive declines in gross domestic product (GDP) have traditionally signaled that a recession is approaching.
On Thursday, US President Joe Biden denied recession worries as he made brief remarks about The Inflation Reduction Act of 2022. The Inflation Reduction Act is a new Democratic budget deal announced in Congress. Democrats say the bill would bring in $739 billion in revenue and would invest $433 billion in spending.
“The Inflation Reduction Act would add an additional $370 billion in clean energy tax credits in the settlement, including incentives to accelerate domestic production of solar panels, wind turbines, batteries and manufacturing important material variables. That doesn’t sound like a recession,” the president said.
Let me be clear.
The Inflation Reduction Act of 2022 will be the most important legislation in history to address the climate crisis and improve our energy security.
– President Biden (@POTUS) July 28, 2022
Despite Biden’s upbeat outlook, consumer prices continue fly up, up 9.1% in June from a year earlier, the biggest annual increase in four decades. On Wednesday, the Federal Reserve lift up its interest rate is equal to 75 basis points. The US central bank previously raised interest rates similarly after its June meeting. In May, borrowing costs doubled.
An increase in the exchange rate also has an impact on the economy. Higher mortgage rates led to a slump in home sales after a boom during the coronavirus pandemic sent prices to record highs. Higher rates have also made the process of buying a new car more difficult and pushed up credit card interest rates.
