Weekly Jobless Claims Remain Near 3-Month Low

The number of individuals filing new applications for unemployment benefits ticked up last week for the first time since early June.

According to the Department of Labor, initial jobless claims rose by 1,000, to 218,000 for the week that ended on July 26, remaining close to a three-month low.

Initial jobless claims, released on July 31, came in below the consensus forecast of 224,000.

After hitting an eight-month high in June, claims have been trending lower as companies remain reluctant to reduce their headcount.

The four-week average, which strips out the week-to-week volatility, declined to 221,000 from 224,500.

A closely watched program for federal workers submitting applications for jobless benefits tumbled by 67, to 722.

Continuing jobless claims—a measure of the number of individuals already receiving unemployment benefits—came in at 1.95 million for the second consecutive week. This was the 10th straight week that recurring claims stayed above 1.9 million, hovering at their highest levels in almost four years.

Market watchers argue that the elevated reading signals that unemployed individuals are finding it more difficult to find work.

Still, according to the Federal Reserve after its July policy meeting, “labor market conditions remain solid.”

However, although employers have refrained mainly from mass terminations, new data suggest that planned job cuts accelerated this month.

Global outplacement firm Challenger, Gray & Christmas reported that U.S.-based employers announced 62,075 layoffs in July, up 29 percent from June. Planned job cuts are also up 140 percent from the same time a year ago.

In the first seven months of the year, companies have announced more than 806,000 layoffs, the highest year-to-date total since 2020. This has been led by government (292,294), technology (89,251), and retail (80,487).

Andrew Challenger, the firm’s senior vice president, attributed the spike to actions related to the Department of Government Efficiency (DOGE).

“We are seeing the federal budget cuts implemented by DOGE impact nonprofits and health care in addition to the government,” Challenger said.

Artificial intelligence and tariff concerns also contributed to this year’s layoffs, he said.

Hiring intentions have been mixed. While hiring announcements through July are below pre-pandemic levels, the 86,132 tally is higher than the same period in 2024.

July Jobs Report

The Bureau of Labor Statistics will release the July jobs report on Aug. 1. Economists are penciling in 110,000 new jobs and an unemployment rate of 4.2 percent.

Seasonal factors could overstate July’s possible gains, according to Joseph Brusuelas, chief economist at RSM US.

“We anticipate seasonal factors to slightly overstate the pace of hiring in July as demand for leisure and hospitality workers offsets the slower pace of hiring in state and local governments, which rose by 80,000 positions in June,” Brusuelas said in a July 31 note.

A slowdown in private-sector payroll growth has caused concerns that the U.S. labor market could be slowing. However, new figures from payroll processor ADP signal a potential rebound.

The National Employment Report noted that private companies added a higher-than-expected 104,000 new jobs in July, a reversal from the 23,000 decline in June.

While ADP statistics suggest that private sector hiring perked up, ADP reports are typically “weaker than the government jobs report,” according to Bill Adams, chief economist for Comerica Bank.

“ADP reports payroll job growth averaged 84,000 per month in the first seven months of the year, while the Bureau of Labor Statistics reports 130,000 jobs per month through June (of which 23,000 per month were in government),” Adams said in a note emailed to The Epoch Times.

Brusuelas said he thinks the private-sector statistics will continue the slowing trend observed over the past six months.

“We expect that to slow further as businesses refrain from adding more workers amid continuing economic uncertainty,” he said.

Earlier this week, the Job Openings and Labor Turnover Summary for June found that the number of employment vacancies fell to 7.43 million from a downwardly revised 7.71 million in May.

The monthly report also showed that new hires and terminations were little changed.