Jobless claims highest in eight months amid recession fears
by Zachary Halaschak, Economics Reporter |
| August 11, 2022 08:31 AM
The number of new applications for unemployment benefits increased by 14,000 last week to 262,000, the highest level in months.
The news bolsters fear the economy is nearing or has already tumbled into a recession. Rising jobless claims, a proxy for layoffs, are a sign that the labor market may be facing some turbulence, although the figures are still low by historical standards.
Around this time in August 2021, new claims were averaging over 400,000 per week. The number of jobless claims bottomed out at 166,000, tallied in mid-March, the lowest figure since 1968.
While the number of jobless claims isn’t anywhere near where it was during most of the pandemic, it has trended upward in recent weeks.
A counterbalance to the argument that the economy is in a recession, though, is that the economy is adding jobs in huge numbers and the unemployment rate is low. The economy added 528,000 jobs in July. The unemployment rate, which is taken from a different data source and a different report than Thursday's jobless claims numbers, also unexpectedly fell to 3.5%, matching the ultralow level it was at prior to the pandemic.
Still, rising jobless claims could be a clue that the tight labor market may be slowing in response to the Federal Reserve aggressively jacking up interest rates. Driving up interest rates naturally slows demand and can result in recessionary conditions.
more
https://www.washingtonexaminer.com/policy/economy/jobless-claims-highest-in-eight-months-amid-recession-fears
