In a reflection of a slowing economy, Americans are staying unemployed for longer, as per the latest Labor Department data.
The number of Americans receiving jobless benefits for multiple weeks has climbed to its highest level since November 2021, according to a Department of Labor report released Thursday.
This data suggests that unemployed Americans may be facing more difficulty in finding work, as the number of continuing claims increased to 1.839 million from 1.821 million for the week ended June 15.
Despite a slight drop in the number of people filing for unemployment for the first time, with 233,000 initial claims made during the week ended June 22, there has been an increase in recent weeks. The four-week average of 236,000 claims is the highest since early September of last year.
Economist Ian Shepherdson noted in a client note that the trend has been an upward one of late, with some leading indicators implying that initial claims should continue to rise through the summer.
According to Shepherdson, this could lead to a significant slowing in job growth in the next three months, potentially below 100,000. This trajectory could impact the unemployment rate and put pressure on the Federal Reserve to act.
The Fed has kept interest rates at a 23-year high while waiting for inflation to slow down. The labor market has played a role in keeping people employed, supporting consumer spending and delaying any concerns of a recession. Job gains have slowed from previous years, with the unemployment rate rising to 4% in May after staying below that level for 27 months.
The number of job openings has also fallen to a three-year low, while consumer spending, a key driver of US economic growth, slowed down in the first quarter of the year according to the final read on first-quarter GDP released Thursday morning.
