Although the labor market is slowing, businesses around the U.S. still have millions of job openings.
The number of Americans collecting jobless benefits last week is at its highest level since November, a sign the labor market is cooling as the Federal Reserve tries to lower inflation by slowing economic growth.
"The direction of filings has changed. from sustained declines to an uptrend, signaling a shift in the labor market. Overall, further interest rate increases will result in a rebalancing in supply and demand for workers, and a further rise in layoffs over coming months," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in note.
"While the labor market may be getting marginally cooler, overall demand for workers continues to exceed the supply," Nancy Vanden Houten, lead U.S. economist at Oxford Economics, said in a research note."Given that imbalance between the supply and demand for workers, we think employers are more likely to first slow hiring rather than lay off workers as the economy slows.
Other indicators point to some weakness in the U.S. economy. The government said last week that the U.S. economyConsumer prices are still soaring, up 9.1% in June compared with a year earlier, the biggest yearly increase in four decades. In response, the Federal Reserve raised its main borrowing rate by another three-quarters of a point last week. That follows June's three-quarter point hike and another half-point increase in May.
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