Unemployment Rises, But Layoffs Don’t

(IntegrityPress.org) – While the number of jobless benefits rose during the final week of June, employment remains at health levels despite rising interest rates, the Associated Press reported.

Unemployment applications rose by 12,000 for the week ending July 1, climbing from 236,000 the previous week to 248,000, according to the Department of Labor. However, the 4-week moving average fell by 3,500 to 253,250.

The economy has been adding jobs at a rapid pace since the COVID lockdowns in the spring of 2020 erased over 20 million jobs, with Americans enjoying unusual job security as businesses have been reticent to lay off staff in a worker-friendly jobs market.

US employers added 339,000 jobs in May while the unemployment rate rose to 3.7 percent.

The Labor Department reported on Friday that 372,000 jobs were added in June with an employment rate of 3.6 percent, easing concerns about an impending recession, the New York Times reported.

According to the New York Times, the private sector has finally returned to its pre-pandemic lockdown job numbers while the public sector remains 664,000 jobs below its pre-pandemic rate.

However, the jobs market complicates the Fed’s efforts to cool inflation.

Officials from the Federal Reserve have said that employment will need to rise above 4 percent for inflation to cool.

The economy has continued to be resilient despite the Federal Reserve’s interest rate hikes.

In late June, the government said that from January through March, the economy grew at an annual pace of 2 percent, significantly higher than the previous 1.3 percent estimate. But that growth combined with the labor market is expected to push the Federal Reserve to increase the interest rate at least two more times before the end of the year.

In June, the Fed chose not to increase its benchmark borrowing rate for the first time in 15 months.

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