Paul Christopher, president of Wells Fargo Investment Institute, provides a professional analysis of the US economy in response to the July CPI report as “better than expected”.
Number of Americans applying unemployment benefits It rose last week, hitting a nine-month high – the latest indication that the historically tight labor market is beginning to ease.
Figures released Thursday by the Labor Department show that orders for the week ending August 6 rose to 262,000 from the downwardly revised 248,000 recorded in the previous week. This is above the pre-pandemic 2019 average of 218,000 claims and marks the highest level since mid-November.
The number of continuing claims, or the number of Americans receiving unemployment assistance in a row, rose slightly to 1.428 million for the week ended July 30, an increase of 8,000 from the revised level for the previous week. One year ago, approximately 12.96 million Americans were receiving unemployment benefits.
For months, the job market has been one of the few bright spots in the economy Jobs report for the month of July It shows the unemployment rate has fallen to 3.5% – the lowest level since February 2020, before the COVID-19 pandemic shut down a wide swath of the US economy. Meanwhile, employers added a staggering 528,000 jobs, nearly double what economists had predicted.
Detailing July inflation: Where do higher prices hit Americans the hardest?
A man hands his resume to an employer at the Central Florida Employment Council’s 25th annual career fair at the Central Florida Fairgrounds. Over 80 companies are hiring for over a thousand jobs. (Paul Hennessy/SOPA Images/LightRocket via Getty Images/Getty Images)
However, there are signs that the labor market is starting to weaken, with a slew of companies, including Alphabet’s Google, Walmart, Apple, Meta and Microsoft, announcing hiring freezes or layoffs in recent weeks.
“An increasing risk to the market outlook is the upward trend of individuals claiming unemployment benefits,” said Jeffrey Roach, chief economist at LPL Financial. “Initial claims and continuing claims have risen slightly over the past four months and indicate that the labor market is likely to slow further during the back half of this year.”
There are growing concerns that the US economy is on the cusp of – or already in – recession as a result The Federal Reserve’s war on inflation. The central bank is raising interest rates at the fastest pace in decades as it races to cool consumer prices, which jumped 8.5% in July – a significant drop from June but still close to multi-decade highs.
“Now Hiring” signs are displayed in front of restaurants in Rehoboth Beach, Delaware, on March 19, 2022. (Stephanie Reynolds/AFP via Getty Images)/Getty Images)
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Policy makers agreed Another big rate hike of 75 basis points – three times the usual size – at their meeting in July and they have since indicated they are “nowhere near” ending this tightening cycle, despite signs of a slowdown in the economy.
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