The U.S. weekly jobless claims report revealed an increase in the number of Americans filing new applications for unemployment benefits to an 11-month high last week, signaling weakness in the labor market. However, claims tend to traditionally be more volatile around this time of the year.
Labor market concerns rise
Initial claims for state unemployment benefits increased by 14,000 to a seasonally adjusted 249,000 for the week ending July 27, the highest level since August 2023. U.S. weekly jobless claims rose above the upper end of their 194,000-245,000 range for this year. The four-week moving average of claims, which excludes seasonal fluctuations, rose 2,500 to 238,000 last week.
Meanwhile, unadjusted claims declined by 10,012 to 215,827 last week. That was less than half of the 21,901 declines that the seasonal factors had expected.
Read: Optimism grows for U.K. markets as Bank of England slashes rates, boosts growth outlook
State-level rises
In Michigan, U.S. weekly jobless claims rose by 4,033 and increased by 3,352 in Missouri. Claims also increased in Massachusetts but declined in Texas by 6,232 after surging in the prior two weeks. Claims also decreased in New York, Ohio, Florida, Tennessee and South Carolina.
The number of people receiving benefits after an initial week of aid increased by 33,000 to a seasonally adjusted 1.877 million during the week ending on July 20, the highest level since November 2021, the U.S. weekly jobless claims report showed.
The government will likely report on Friday that nonfarm payrolls increased by 175,000 jobs last month after rising by 206,000 in June. The unemployment rate will likely remain stable at 4.1 percent after 3 consecutive months of increases.
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