The number of Americans who signed up for unemployment benefits rose last week to the highest level since November, though the U.S. job market continues to show signs of strength.
Applications for jobless aid climbed by 14,000 to 262,000 and now have risen five out of the last six weeks, the Labour Department reported on Thursday.
The four-week average for claims, which smooths out weekly ups and downs, rose by 4,500 to 2,52,000, also the highest since November.
Unemployment applications are a proxy for layoffs and are often seen as an early indicator of where the job market is headed.
So far this year, hiring in the United States has been remarkably strong and resilient in the face of rising interest rates and weak economic growth.
The Labour Department reported last week that U.S. employers added 528,000 jobs last month, more than double what forecasters had expected.
The unemployment rate dipped to 3.5% in July, tying a 50-year low reached just before coronavirus pandemic slammed the U.S. economy in early 2020.
The United States recovered with unexpected strength from 2020's COVID-19 recession, leaving businesses scrambling to find enough workers.
But the U.S. economy faces challenges. Consumer prices have been surging, rising 8.5% in July from a year earlier — down slightly from June's 40-year high 9.1%.
To combat inflation, the Federal Reserve has raised its benchmark short-term interest rate four times this year.
Higher borrowing costs have taken a toll. The economy contracted in the first half of the year — one rule of thumb for the onset of a recession.
But the strength of the job market is inconsistent with an economic downturn.