US Jobless Claims Rise Amid Elevated Inflation

Despite a slight increase in jobless benefits filings last week, layoffs remain historically low. According to the Labor Department, US filings for jobless aid rose by 1,000 to 199,000 in the week ending August 1. This is after the previous week's figure was revised up by 1,000 to 198,000.

The Federal Reserve's preferred inflation metric, PCE, came in at 3.7% for June, still above the US central bank's 2% target. Fed officials say they are ready to raise interest rates to combat higher prices, which could make businesses less likely to hire. Last month, employers pulled back on hiring in June, adding only 57,000 jobs, a sign that companies remain cautious about adding to their headcounts.

Weekly jobless aid applications have stabilized in a range mostly between 200,000 and 250,000 since the US economy emerged from the pandemic recession. However, hiring began slowing about two years ago due to various factors including President Donald Trump's tariffs, his purge of the federal workforce, and the lingering effects of high interest rates meant to control inflation.