Due to investors awaiting the June employment data to be released on Friday, the initial claims for unemployment benefits rose after several weeks of decline. The increase in the number of unemployment benefit applications (a measure of the number of people applying for unemployment insurance each week) may be another sign of weakness in the labor market as the Fed considers when to cut interest rates.
The U.S. Department of Labor weekly reports the number of people applying for unemployment benefits. According to the latest data, the number of initial claims for unemployment benefits was 238,000, up from 234,000 the previous week (forecasted at 235,000). The continuing claims were 18.58 million.
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This week is an important one for labor market data, as the Fed will look for concrete evidence that inflation has returned to the 2% target before making a decision on interest rate cuts. The expectations of many economists are that the Fed will lower the benchmark interest rate in July.
A weakened labor market will affect the demand for goods and services, thereby assisting the bank in coping with severe price increases.
On Tuesday, the U.S. Bureau of Labor Statistics showed that the number of job vacancies in May exceeded economists’ expectations.
The June employment statistics will be released on Friday.
