In the United States last week, the number of new applications for unemployment benefits decreased. However, experts analyze that due to the uncertain economic outlook affecting business hiring, the unemployment rate in June may still rise.
The US Department of Labor announced on Thursday (June 26th) that for the week ending June 21st, the number of people filing for state unemployment benefits for the first time decreased by 10,000 to 236,000 after seasonal adjustments. Economists surveyed by Reuters had previously predicted that the number of new claims for the latest week would be 245,000. This data includes the June holiday around National Independence Day last week, and there is often fluctuation in claims around public holidays.
Technical factors and the start of school summer vacation are partially responsible for the recent increase in claims, pushing the number of claims to the upper limit of 205,000 to 250,000 for the week. Some non-teaching staff in certain states are eligible to apply for unemployment benefits during the summer vacation period.
Economists state that there has been no improvement in hiring, possibly impacted by President Trump’s imposition of import tariffs, affecting companies’ advance planning.
The Federal Reserve has responded to economic uncertainty by pausing the interest rate cuts. Federal Reserve Chairman Jerome Powell told lawmakers this week that the central bank he leads needs more time to assess whether tariffs have raised inflation before considering rate cuts.
Last week, the Federal Reserve maintained the federal funds rate between 4.25% and 4.50%, a level unchanged since December last year.
Nevertheless, the number of layoffs remains at historically low levels, a key reason for the stability of the labor market.
In the week ending June 14th, the seasonally adjusted number of ongoing unemployment benefit recipients in the US was 1.974 million, the highest level since November 2021.
The so-called continued claims include the government’s household survey to calculate the unemployment rate for that week in June.
The increase in ongoing unemployment benefit recipients has led many economists to predict that the June unemployment rate will rise from 4.2% in May to 4.3%.
A survey by The Conference Board this week revealed that the percentage of consumers in June who believe that job opportunities are “plentiful” has dropped to its lowest level in over four years.
The Federal Reserve Bank of Atlanta predicts that the US GDP growth rate for the second quarter will reach 3.4%.
The Trump administration’s temporary suspension of tariff increases is set to expire in mid-July and mid-August, and it is currently unclear what will happen next.