The number of Americans filing new claims for jobless benefits rose last week, indicating a loosening labor market condition.
Initial claims for jobless benefits rose 4,000 to a seasonally adjusted 238,000 for the week ended June 29, the Labor Department reported on Wednesday. This report was released a day early due to the Independence Day holiday on Thursday.
Economists polled by Reuters had forecast 235,000 claims in the latest week.
Benefit claims have moved above the 194,000-243,000 range this year, partly due to increased layoffs as higher interest rates dampen demand as well as difficulty adjusting data for seasonal fluctuations during the holidays.
Volatility could continue after the 4th of July holiday. Car manufacturers usually stop assembly plants for tools.
The labor market is cooling gradually, with the government reporting on Tuesday that there were 1.22 job openings for every unemployed person in May. The ratio of job vacancies to unemployment is close to an average of 1.19 in 2019.
Federal Reserve Chairman Jerome Powell said on Tuesday that the economy is on a "disinflationary" path, but policymakers need more data before cutting rates.
Financial markets remain optimistic that the U.S. central bank will can begin its easing cycle in September.
The Fed has kept its benchmark overnight interest rate in the current 5.25%-5.50% range since last July. It has raised its policy rate by 525 basis points since 2022 to eliminate inflation.
The number of people receiving benefits after the first week of aid, a proxy for hiring, rose 26,000 to a seasonally adjusted 1.858 million in the week ended June 22, the highest level since late November 2021, based on the claims report.
A separate report Wednesday from global relocation firm Challenger, Gray & Christmas showed U.S.-based employers. announced 48,786 job cuts in June, down 23.6% from May. However, planned layoffs are 19.8% higher than in June last year.
The government is expected to report on Friday that nonfarm payrolls rose by 190,000 jobs in June after rising 272,000 in May, according to a Reuters poll of economists. The unemployment rate is expected to remain unchanged at 4.0%.
