Jobless claims surge to highest level in 6 months as employers cut jobs due to weakening economy
07/08/2022 / By Arsenio Toledo
The number of Americans who have filed initial jobless claims has risen to a six-month high, marking the fifth consecutive month that weekly claims for unemployment benefits have topped the 230,000 mark.
According to government data from the Department of Labor, initial filings for state unemployment benefits increased by 4,000 to a seasonally adjusted 235,000 claims for the week ending on July 2. This marks the highest number of weekly jobless claims in almost six months. This number has also pushed the four-week rolling average up to 232,500, the highest it has been since early Dec. 2021. (Related: Americans are quitting jobs at record pace, forcing employers to offer more to attract workers.)
Jobless claims have gone down since June 2021, but right around April to May they started ticking back up again. Until early June, claims weren’t breaching the 220,000-mark.
While the record-high number of initial jobless claims is suggesting some clouding in the job market, analysts have noted that this does not necessarily imply that a recession is on the way, although it is still a possibility.
“Jobless claims … continue to weaken, but realistically they’re back to 2018/2019 levels and aren’t suggesting recession,” wrote financial company Richard Bernstein Advisors.
Continuing unemployment claims, which run a week behind initial claims and reflect the total number of people that receive benefits through state unemployment programs, has surged by 51,000 to 1.375 million.
“The labor market seems to be in a state of flux,” said Peter C. Earle, a research fellow at the think tank the American Institute for Economic Research. “The decisions of the Federal Reserve over the next six months will determine whether there is a gentle slope or a cliff ahead of economic growth and employment over the rest of 2022 and 2023.”
“The rise in claims underscores some moderation in what’s been an extremely tight labor market, as applications hold near the highest level since January,” noted Maria Paula Mijares Torres, economy news writer for Bloomberg.
Employers dealing with increased financial pressures and slowing demand
Job placement firm Challenger, Gray and Christmas reported that planned layoffs in June have soared to 32,517, up by a massive 57 percent from a month ago and the highest total planned monthly layoffs since Feb. 2021.
“Employers are beginning to respond to financial pressures and slowing demand by cutting costs,” noted Andrew Challenger, senior vice president of the firm, in a statement. “While the labor market is still tight, that tightness may begin to ease in the next few months.”
Most of the job cuts are coming from the auto sector, which announced 10,198 cuts, bringing the industry’s yearly total to 15,578 so far. This represents a massive 155 percent increase in planned layoffs in the same period in 2021.
“Technology companies are also cutting workforces as inflation and recession concerns deepen,” said Challenger.
“Interest-rate hikes by the Federal Reserve are expected to cool demand for workers, which could lead to more layoffs beyond select job-cut announcements at companies like Netflix and Tesla,” wrote Mijares Torres.
Learn more about the collapse of the American economy at MarketCrash.news.
Watch this episode of the “Health Ranger Report” as Mike Adams, the Health Ranger, notes how the American economy is like the Titanic, and it is about to hit a debt iceberg that will sink it.
This video is from the Health Ranger Report channel on Brighteon.com.
More related stories:
Age of un-retirement: Former retirees getting back to work as inflation gets worse.
Economist: America about to enter next stage of inflation, which will be so much worse.
Coinbase lays off 18% of workers as cryptocurrencies plummet in value.
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