The number of initial claims for unemployment insurance increased by 20,000 during the week ended Saturday (July 13), driven by temporary closures of automobile plants and the effects of Hurricane Beryl.
The total of 243,000 initial claims filed during the week was up from the previous week’s revised figure of 223,000, the Department of Labor (DOL) said in a Thursday (July 18) press release. The previous week’s figure was revised up by 1,000.
The four-week moving average of 234,750 was 1,000 higher than the previous week’s revised average of 233,750, which was revised up by 250, according to the release.
The number of initial claims exceeded economists’ expectations by 13,000, Reuters reported Thursday. Economists polled by the media outlet had forecast 230,000 claims.
Reuters attributed the greater-than-expected increase automobile manufacturers’ annual temporary closures of plants as they retool for new models and the effects of Hurricane Beryl, adding that the rise did not indicate a material shift in the labor market.
The economy has also seen a slowing of job growth. ADP reported July 3 that private sector job growth cooled in June, marking the third consecutive month of a slowdown.
ADP reported that if there hadn’t been a rebound in hiring in the leisure and hospitality sector, June would have been a downbeat month.
In comments supplied to the DOL, the state with the greatest increase in the number of initial claims filed during the week ended July 6, Michigan, said the change was driven by layoffs in the manufacturing industry. Michigan reported an increase of 10,578 initial claims during that week.
The DOL also reported Thursday that the insured unemployment rate was 1.2% for the week ended July 6, unchanged from the previous week’s rate, which was unrevised.
The insured unemployment number for that week was 1,867,000, which was 20,000 higher than the previous week’s revised figure of 1,847,000. The figure for the previous week was revised down by 5,000, per the release.
“This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000,” the DOL said in the release.
Reuters said that the loosening labor market, together with lower inflation, suggests that the Federal Reserve will cut interest rates in September.
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