Jobless claims tick upward despite robust hiring
The number of Americans who signed up for unemployment benefits rose last week to the highest level since November, though the U.S. job market continues to show signs of strength.
Applications for jobless aid climbed by 14,000 to 262,000 and now have risen five out of the last six weeks, the Labor Department reported Thursday.
The four-week average for claims, which smooths out weekly ups and downs, rose by 4,500 to 252,000, also a peak since November.
The number of Americans collecting traditional jobless benefits increased by 8,000 the week that ended July 30 to 1.43 million, highest since early April.
Unemployment applications are a proxy for layoffs and are often seen as an early indicator of where the job market is headed.
So far this year, hiring in the U.S. has been strong and resilient in the face of rising interest rates and weak economic growth.
The Labor Department reported last week that employers added 528,000 jobs last month, more than double what forecasters had expected. The unemployment rate dipped to 3.5% in July, tying a 50year low reached just before coronavirus pandemic slammed the U.S. economy in early 2020.
More Americans applied for jobless benefits last week, the Labor Department reported Thursday, though the labor market remains one of the strongest parts of the U.S. economy.
from June to July, the first monthto-month drop in more than two years and a sign that some of the U.S. economy’s inflationary pressures cooled last month.
Thursday’s report from the Labor Department showed the producer price index — which measures inflation before it reaches consumers — declined 0.5% in July. It was the first monthly drop since April 2020 and was down from a sharp 1% increase from May to June.
The easing of wholesale inflation suggests that consumers could
get some relief from relentless inflation in the coming months. The wholesale report follows government data Wednesday that showed that consumer inflation was unchanged from June to July — the first flat figure after 25 straight months of increases.
Consumers’ views on housing market take a downward turn
Consumers have become the most pessimistic about housing since 2011, when home prices bottomed
in the wake of the global financial crisis, data from Federal National Mortgage Association shows.
Fannie Mae’s Home Purchase Sentiment Index dropped to the lowest level in over a decade as consumers expressed pessimism about homebuying prospects. The index, which reflects consumers’ views on the housing market, has fallen from roughly 76 to 63 year over year, according to a release Monday.
Sentiment hasn’t been as bad since the post-crisis era, when home values plunged as borrowers struggled to make payments, leaving millions facing foreclosure.
But this time, the concern is different: this is an affordability crisis. As the Federal Reserve raises benchmark borrowing costs, rates on a 30-year fixed-rate mortgages have almost doubled year over year, standing at 5.43% in late July compared to 2.97% a year earlier, putting homeownership out of reach for more and more Americans. Sales of new U.S. homes fell to a more than two-year low in June.
Four of the index’s six components dropped month over month, including views on buying and selling conditions, home price outlook and job loss concerns, said Fannie Mae. Consumers were most concerned about buying conditions, as the sentiment changed the most year over year with 76% of respondents saying it’s a bad time to buy.
And although home price appreciation has been the story of the year, consumers are starting to say that the trend is over. Respondents who believe home prices will go up in the next 12 months fell to 39% in July from 44% in June, while the percentage who said home prices will go down increased to 30% from 27%.
With home price growth slowing, and projected to slow further, Doug Duncan, Fannie Mae senior vice president and chief economist, expects a mixed reaction from consumers.