WASHINGTON (AP) — The number of applications for jobless benefits in the United States reached a record low last week, marking the lowest level in over fifty years. Despite economic uncertainties, layoffs remain historically minimal.
According to the Labor Department, 22,000 fewer Americans applied for unemployment benefits in the week ending July 18, reducing the total to 187,000. This figure represents the smallest number of weekly applications since the week ending September 6, 1969. Analysts surveyed by FactSet had anticipated new applications to be around 215,000.
Weekly unemployment benefit filings serve as an indicator of layoffs and reflect the current health of the U.S. employment market. Despite rising oil prices due to the U.S.’s military actions in Iran, the job market maintains its robustness.
Analysts warn that extended conflict and persistently high energy costs might prompt companies to cut down expenses by reducing their workforce. Carl Weinberg, chief economist at High Frequency Trading, commented, “The economic crisis caused by the energy supply shock is not over yet. However, the labor market has yet to show any signs of deterioration from increased oil prices.”
Early Thursday saw U.S. crude oil prices rise by nearly 5% to more than $91 per barrel, the highest level in about six weeks. Gas prices also rose above $4 a gallon on average. This increase burdens both consumers and businesses dependent on fuel.
The June jobs report highlighted cautious hiring, with employers adding only 57,000 jobs, less than half of the previous month’s total. The unemployment rate decreased slightly to 4.2% from May’s 4.3%, partially because some job seekers have stopped searching for employment.
The report of slowed hiring follows earlier months’ job gains, despite concerns that the conflict in Iran might destabilize the labor market. Since emerging from the pandemic recession, weekly jobless benefits claims have consistently been between 200,000 and 250,000.
Hiring deceleration began about two years ago, influenced by tariffs, workforce reductions, and high interest rates intended to curb inflation. Companies like Verizon, UPS, Amazon, Disney, Starbucks, and Walmart have cut their workforce recently. Microsoft announced a reduction of 4,800 jobs, which impacts 2.1% of its global workforce.
The four-week moving average of weekly jobless claims, compensating for fluctuations, decreased by 7,250 to 207,500. The total unemployment benefit filings until the week ending July 11 also fell by 2,000 to just under 1.8 million, demonstrating a historically healthy figure.