Rise in US jobless claims points to weaker labor market

The number of Americans who continue to receive unemployment benefits surged to its highest since November 2021. Bloomberg notes that increasingly more people struggle to find a new job quickly. In the week ended June 14, the number of recurring jobless claims increased to 1.97 million, above the news agency’s estimates. 

Meanwhile, new applications for unemployment benefits dropped to 236,000 in the week to June 21. The four-week average for initial claims also dipped, pointing to short-term stability. The news agency explains that companies are hesitant to lay off employees actively, yet they are also in no rush to hire new ones. Bloomberg economist Stuart Paul believes economic uncertainty prompts firms to be cautious in hiring. 

Earlier, Federal Reserve Chair Jerome Powell said the US labor market was steady. However, Richmond Fed President Tom Barkin warned that higher import duties could weigh on economic activity and, as a result, drive unemployment higher.