The numbers: The number of Americans who applied for unemployment benefits last week rose to 248,000, putting them close to a two-year high.
Yet most of the increase took place in just a few states, Michigan and New York, and might partly reflect annual summer retooling at auto plants.
New jobless claims advanced by 12,000 from a revised 236,000 in the prior week, government data showed.
Unemployment claims typically rise when the economy weakens and a recession approaches. Claims have crept up this year from historic lows, but they still aren’t pointing to a sharp deterioration in the labor market.
Key details: New jobless claims increased in 30 of the 53 states and territories that report these figures to the federal government. The other 20 posted declines.
The biggest increase took place in Michigan, perhaps a result of typical summer retooling at auto plants to make way for new models. Auto workers can file claims in some states when their plants are temporarily shut down.
Kentucky, another auto-producing state, reported an unusually large increase.
New York also reported a spike in claims, possibly as a result of the end of the school year. The Big Apple’s total jobless filings are influence by educational employment patterns more than most other states.
The number of people collecting unemployment benefits in the U.S., however, fell by 13,000 to 1.72 million. That’s the third decline in a row and puts these so-called continuing claims at a five-month low.
The reversal in continuing claims suggests that laid-off workers are finding new jobs relatively quickly.
Big picture: There’s little sign of a sharp increase in layoffs and the economy is still adding lots of new jobs. Wall Street expects a 240,000 increase in employment in June.
Read: Private sector adds 497,000 jobs in June, ADP says. Biggest gain in a year
While a strong labor market is great for workers, the Federal Reserve worries the demand for labor is adding to high inflation and making it harder to get under control. The Fed wants to see the jobs market cool off.
Unless hiring slow soon, the Fed could keep raising interest rates and raise the odds of recession.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades. The strong increase in jobs reported by ADP has renewed worries about more Fed rate hikes.
This story originally appeared on Marketwatch
