?States reported that 239,000 workers filed for new unemployment benefits during the week ending June 24, a decrease of 26,000 from last week’s revised level. The drop in claims follows three weeks of slightly higher than average numbers.
About 1.74 million workers continue to claim unemployment benefits. Economists point out that unemployment remains low by historic standards. The unemployment rate increased to 3.7 percent in May. Though the labor market remains strong, some sectors have been beset by layoffs, mostly due to overhiring during the pandemic.
Layoffs were expected to spike this year as the effects of interest rate hikes spread through the economy, but that has not happened yet to any significant degree. Some still expect a mild recession by the second half of the year or in early 2024, while others point to the labor market’s remarkable resilience throughout the lengthy interest rate hike campaign designed to slow it down.