Applications for U.S. state unemployment insurance rose to the highest level since November during the week that included the July 4 holiday, led by a big jump in New York.
Initial unemployment claims increased by 9,000 to 244,000 in the week ended July 9, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 235,000 applications.
Continuing claims for state benefits fell to 1.33 million in the week ended July 2, the biggest drop since April.
The rise in unemployment claims comes as more companies announce job cuts amid increasing fear of a U.S. recession. While the labor market has so far held strong in the face of rising interest rates, the Federal Reserve may ratchet up its fight against decades-high inflation with even bigger hikes, which could curb demand for workers.
In recent weeks, companies such as Alphabet Inc.’s Google and Microsoft Corp. have said they’ll slow hiring in a time of global economic uncertainty. While many of the job-cut announcements have come from the tech sector, others in housing, autos and energy have also warned of letting workers go.
The jobless claims data, which can be choppy from week to week, tend to be especially volatile around holidays. The four-week moving average, which smooths out such swings, rose by 3,250 to 235,750. It’s climbed in 13 of the last 14 weeks.
On an unadjusted basis, initial claims increased to 241,314 last week. New York posted an outsize advance of more than 10,000, while Kentucky and Indiana each had jumps closer to 3,000.
The report follows Wednesday’s inflation data, which showed U.S. consumer prices rose 9.1% in the year through June to a fresh 40-year high. A separate report Thursday showed prices paid to U.S. producers rose in June by more than forecast, indicating inflationary pressures remained elevated prior to a more recent decline in commodities costs.