US applications for jobless benefits rise last week, but layoffs remain historically low
Unemployment Benefits Climb Slightly in the U.S. as Layoffs Remain Stable
Last week, more Americans filed for unemployment benefits, with applications rising by 11,000 to 235,000 for the week ending Aug. 16. While this is slightly higher than economists’ forecasts of 229,000 new applications, it is important to note that U.S. layoffs have remained in a historically healthy range over the past few years.
Weekly applications for jobless benefits are considered a proxy for layoffs and have consistently stayed between 200,000 and 250,000 since the U.S. started recovering from the COVID-19 pandemic more than three years ago.
However, despite the overall stability in layoffs, there have been signs of a weakening labor market this year. The latest report showed that U.S. employers added only 73,000 jobs in July, falling short of analysts’ expectations. Additionally, revisions to previous months’ figures resulted in a lower job count, and the unemployment rate edged up to 4.2% from 4.1%.
One standout in the report was the rising unemployment rate in Washington, D.C., which surpassed 6% in July for the third consecutive month, making it the highest in the country. This increase can be attributed to the mass layoffs of federal workers by the Department of Government Efficiency earlier this year and the decline in international tourism revenue for the District.
Neighboring states like Maryland and Virginia, where many federal employees reside, also experienced a rise in unemployment rates in July. Since the start of President Trump’s second term, federal workers across various government agencies have faced layoffs or voluntary resignation requests, leading to legal challenges from labor unions and advocacy groups.
On a broader scale, a recent report highlighted that employers posted 7.4 million job vacancies in June, down from 7.7 million in May. Furthermore, the number of people quitting their jobs, a sign of confidence in finding better opportunities, decreased to the lowest level since December.
Several major companies have announced job cuts this year, including Procter & Gamble, Dow, CNN, Starbucks, Southwest Airlines, Microsoft, Google, and Meta. Intel and The Walt Disney Co. have also recently revealed plans for staff reductions.
Economists believe that the unpredictable implementation of tariffs by President Trump against U.S. trading partners has created uncertainty for employers, leading them to be cautious about expanding their workforce.
The Labor Department’s latest report also indicated that the four-week average of claims increased by 4,500 to 226,500, and the total number of Americans collecting unemployment benefits for the previous week rose by 30,000 to 1.97 million, marking the highest level since November 6, 2021.
