The New Normal: Slightly fewer Americans apply for jobless claims last week
Slightly fewer Americans applied for unemployment benefits last week, reflecting a robust job market despite rising job cuts in some sectors of the economy that have cooled in recent months.
Applications for jobless aid for the week ending June 25 ticked down to 231,000, a decline of 2,000 from the previous week, the Labor Department reported Thursday. First-time applications generally represent the number of layoffs.
The four-week average for claims, which evens out some of the week-to-week volatility, rose by 7,250 from the previous week, to 231,750.
The total number of Americans collecting jobless benefits for the week ending June 18 was 1,328,000, down 3,000 from the previous week. That figure has hovered near 50-year lows for months.
Much of the recent job security and wage gains that Americans have enjoyed recently have been gobbled up by inflation levels not seen in four decades.
Earlier in June, the Labor Department reported that consumer prices surged 8.6% last month from a year earlier. The Federal Reserve responded by raising its main borrowing rate - its main tool for fighting rising prices - by three-quarters of a point. That increase is on top of a half-point increase in early May.
The government reported that U.S. employers added 390,000 jobs in May, extending a streak of solid hiring that has bolstered an economy under pressure. Though the job growth in May was healthy, it was the lowest monthly gain in a year and there have been signs that more layoffs could be coming, at least in some sectors.
Jobless claims applications the past few weeks, though still relatively low, have been the highest since the first weeks of 2022 as some highly visible companies have announced job cuts.
The CEO of electric car maker Tesla, Elon Musk, acknowledged that the company was cutting about 10% of its salaried workforce, or 3.5% of its total headcount. Musk has described the electric automaker’s factories in Austin and Berlin as “money furnaces” that were losing billions of dollars because supply chain breakdowns were limiting the number of cars they can produce.
Netflix laid off 150 employees in May and another 300 in June after the streaming entertainment giant reported losing subscribers for the first time in more than a decade.
Online automotive retailer Carvana said last month that it’s letting about 2,500 workers go, roughly 12% of its workforce.
Online real estate broker Redfin, under pressure from a housing market that’s cooled due to higher interest rates, is laying off 8% of its workers. Another real estate company, Compass, is letting go of 450 employees.
Those cuts have extended to companies in the cryptocurrency sector with prices for bitcoin and other digital assets cratering in recent months.
Crypto trading platform Coinbase Global is cutting about 1,100 jobs, about 18% of its global workforce, as part of a restructuring in order to help manage its operating expenses in response to current market conditions.