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The numbers: The number of Americans who applied for unemployment benefits last week rose slightly to 227,000 from a five-month low, offering more evidence that layoffs are low and the labor market remains robust.
New jobless claims increased by 6,000 from a revised 221,000 in the prior week, the government said. The number of claims from two weeks ago was the lowest since February.
Unemployment claims typically rise when the economy weakens and a recession approaches. Yet claims still show a low number of layoffs taking place in a surprisingly resilient U.S. economy.
Key details: New jobless claims fell in 32 of the 53 states and territories that report these figures to the federal government.
The other 21 posted higher claims, but most of the increases were small.
Jobless claims are often choppy in July due to the end of the school year, the July 4 holiday and annual shutdowns of automobile plants to retool for new models.
The number of people collecting unemployment benefits in the U.S., meanwhile, rose by 21,000 to a still-low 1.7 million. Most laid-off workers appear to be finding new jobs relatively quickly.
Big picture: A steady increase in new U.S. jobs and paucity of layoffs has given hope to Federal Reserve officials that they can slow inflation without tipping the economy into recession. That’s what usually happens when the Fed raises interest rates to contain inflation.
As long as most people are working, they are likely to spend enough money to keep the economy in expansion mode.
Looking ahead: “The claims data today offers further evidence that the spike in claims to 18-month highs in the middle of June was more likely a statistical quirk than a sign of legitimate weakening in labor market conditions,” said economist Thomas Simons of Jefferies.
“Job growth is likely going to continue to slow from here, but not for lack of demand,” he added. “The lack of supply of available labor makes it increasingly difficult to find to fill open positions.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades.
See also: July jobs forecast: 200,000. Still too hot for the Fed, but the devil is in the details.
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