Jobless claims inch up ahead of Friday jobs report

Tobias Burns
·2 min read

The number of Americans claiming unemployment benefits climbed slightly last week amid broader strength in the U.S. labor market.

Claims rose to 227,000 for the week ending July 29, up 6,000 from the previous week, ahead of more comprehensive jobs data to be released Friday by the Labor Department.

Despite the uptick, U.S. employers cut just 23,697 jobs in July, the lowest number in 11 months, according to employment research firm Challenger, Gray and Christmas.

“Companies, weary of letting go of needed workers, are finding other ways to cut costs. Many have slowed hiring, but wages continue to rise, particularly for the lowest-wage earners, for the moment,” said Andy Challenger, a senior vice president with the company, in a statement.

The numbers come after a slight decrease in the number of job openings in the economy for June and after an unexpected surge in private-sector employment for July, as reported in Wednesday’s ADP National Employment Report.

Private employers added 324,000 jobs in July, according to ADP, coming in well above expectations at around 175,000.

The report was another surprise in labor market data that has consistently defied negative predictions and left many economists with egg on their face.

“The economy is doing better than expected and a healthy labor market continues to support household spending,” said Nela Richardson, ADP’s chief economist, in a Wednesday statement. “We continue to see a slowdown in pay growth without broad-based job loss.”

Additional labor data released Thursday showed a large increase in worker productivity and a decrease in the price of labor for employers.

Productivity surged 3.7 percent in the second quarter, the biggest move since 2020, though economists caution that quarterly productivity data can be hard to interpret. Economists surveyed by Bloomberg had been expecting a rise of only 2.2 percent.

Total compensation for employees was up 4.5 percent annually in the second quarter, down from 4.9 percent in the first quarter and off a recent high of 5.1 percent in the second quarter of 2022.

Unit labor costs increased 2.4 percent compared to a year ago, down from 3.6 percent in the first quarter off a recent high of nearly 7 percent in the second quarter of last year.

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