US weekly jobless claims increase to 11-month high

TradingKeyAug 1, 2024 12:55 PM

- The number of Americans filing new jobless claims rose to an 11-month high, indicating a slight weakening in the labor market, with claims affected by seasonal volatility.

- Initial claims for state unemployment benefits climbed by 14,000 to 249,000 for the week ended July 27, the highest level since August last year, according to the Labor Department.

- Despite the increase, layoffs remain low, but the labor market slowdown is attributed to subdued hiring due to the impact of the Federal Reserve's interest rate hikes.

The Labor Department reported a rise in initial jobless claims to an 11-month peak, reaching 249,000 in the latest week, reflecting some softness in the labor market. The increase in claims is partially linked to temporary factors such as motor vehicle plant shutdowns and disruptions from Hurricane Beryl. While layoffs remain low, the Federal Reserve's tightening monetary policy seems to be affecting hiring trends. Challenger, Gray & Christmas reported a significant drop in planned job cuts by U.S. companies in July, indicating a more stable labor market. Federal Reserve Chair Jerome Powell hinted at a potential rate cut in the upcoming months, reflecting concerns about the labor market's trajectory.

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