States reported that 248,000 workers filed for new unemployment benefits during the week ending July 1, an increase of 12,000 from last week’s revised level.
About 1.72 million workers continue to claim unemployment benefits. Economists point out that unemployment remains low by historic standards. The unemployment rate rose to 3.7 percent in May, and although the labor market remains strong, some sectors have been beset by layoffs, mostly due to overhiring during the pandemic.
Layoffs were expected to spike this year as the effects of interest rate hikes spread through the economy, but that has not happened to any significant degree. Some still expect a mild recession by the second half of the year or in early 2024, while others point to the labor market’s remarkable resilience throughout the lengthy interest rate hike campaign designed to slow it down.
On Friday, the Department of Labor will report on how many jobs the U.S. economy added in June, the unemployment rate and wage gains for the month.