The number of Americans filing initial claims for jobless benefits rose slightly last week, indicative of a still very tight labor market.
Initial claims rose to a seasonally adjusted 227,000 in the week that ended July 29, the Labor Department said Thursday. This was a rise of 6,000 from the prior week, which was 7,000 lower than the week that preceded it.
The four-week moving average of weekly claims, which smooths out the volatility in the weekly figures, declined to 228,250.
Initial claims have been coming in at low levels in recent weeks, falling substantially in three out of the past five weeks. Some of those declines may have been due to various holidays, such as July 4th and Juneteenth. Especially in a tight labor market, employers do not want to seem callous (or worse) by announcing payroll reductions around important national holidays.
What’s more, employee summer vacations can force employers to hold back on layoffs.
Layoffs are expected to increase in the weeks ahead, based on regulatory filings and media reports. The claims numbers for last week, for example, do not factor in the Sunday shutdown of trucking giant Yellow.
Continuing jobless claims increased to a seasonally adjusted 1.7 million in the week ending July 22, up 21,000 from the week before. This level suggests that many workers are quickly finding new jobs after being laid off and the small size of the increase suggests that finding new work has not become significantly more difficult.
The pace of hiring and the number of job openings appears to have slowed compared with last year. U.S. employers added 209,000 jobs in June, according to the Department of Labor, and economists expect the Labor Department to report on Friday that employers added 200,000 workers to payrolls in July. The unemployment rate remains extremely low at 3.6 percent, although it has inched up from the recent low of 3.4 percent.
Payroll processor ADP, however, has said its own measure of payroll growth for the private sector indicates stronger hiring. It said Wednesday that businesses hiring 455,000 workers in June and 324,000 in July.
In the first six months of the year, ADP’s estimates have averaged 256,000 per month and the Labor Department’s 278,000, both indicating strong hiring.
On Tuesday, the government said the number of vacant jobs held steady at around 9.6 million.
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