US filings for jobless benefits rise to 199,000 last week, but layoffs remain historically low

The Labor Department reported on Thursday that the number of Americans filing for unemployment benefits increased last week to 199,000, marking a rise of 1,000 compared to the previous week's revised figure of 198,000. These weekly filings are considered an indicator of layoffs and provide a real-time view of the health of the U.S. job market.

Inflation, as measured by the Federal Reserve's preferred metric PCE, stood at 3.7% in June, surpassing the 2% target set by the U.S. central bank. Higher inflation could prompt the Fed to raise interest rates, adding costs for businesses and potentially discouraging them from hiring new employees. In June, employers added only 57,000 jobs, a figure that represents less than half of the previous month's total, signaling caution among companies to expand their workforce.

The unemployment rate dropped to 4.2% from 4.3% in May, largely due to individuals who previously sought employment giving up and thus no longer being counted as unemployed. The government is set to release the July jobs report on Friday. While weekly jobless benefit applications have stabilized in a range of 200,000 to 250,000 since the U.S. economy recovered from the pandemic, hiring has been on a decline for the past two years, further impeded by factors such as President Donald Trump's tariffs, the reduction of the federal workforce, and the lingering impact of high interest rates aimed at taming inflation.

Recent layoffs have been reported among several major companies, including Verizon, UPS, Amazon, Disney, Starbucks, Walmart, and Microsoft.