Jobless requests rise for third week

Applications for U.S. state unemployment insurance rose for a third week to the highest since November as more companies announce job cuts, suggesting some softening in the labor market.

Initial unemployment claims increased by 7,000 to 251,000 in the week ended July 16, Labor Department data showed Thursday.

The figures coincide with the reference period for the July jobs report that’s due early next month.

The median estimate called for 240,000 applications in a Bloomberg survey of economists.

Continuing claims for state benefits rose 51,000 to 1.38 million in the week ended July 9, the biggest weekly increase since November.

Unemployment claims are rising as more companies announce job cuts amid increasing fears of a recession.

The trend may continue as the Federal Reserve ratchets up its fight against rampant inflation with some of the largest interest-rate hikes in decades, which could ultimately curb demand for workers.

On an unadjusted basis, initial claims increased to 248,991 last week.

Unadjusted claims in Massachusetts rose by more than 14,000. California, South Carolina and Georgia also posted increases.

In recent weeks, a slew of tech companies – including giants like Alphabet Inc.’s Google, Apple Inc., Meta Platforms Inc. and Microsoft Corp. – have said they’ll slow hiring in a time of global economic uncertainty.

Firms in other industries like crypto, housing and autos have also said they’re letting workers go.

The jobless claims four-week moving average, a measure which smooths out some of the volatility in the series, ticked up to 240,500, the highest since early December.

UP profit falls with higher costs

Union Pacific Corp.’s quarterly operating profit margins fell from a year earlier amid higher costs and network congestion that caused carloads to drop.

Operating margins were 40% in the second quarter, a decline of about 5 percentage points from a year earlier, even as higher prices drove sales up, Union Pacific said in a statement.

The railroad lowered its 2022 target for operating profit margins by about 2 percentage points to 42%.

The second quarter “was all about recovery and adding the necessary resources and experiencing the necessary costs to recover more quickly than we would otherwise,” Chief Executive Officer Lance Fritz said on a conference call with analysts.

The railroad is poised to increase carloads in the second half of this year, he said.

U.S. railroads, including Union Pacific, have blamed declining train speeds and the longer times that railcars sit idle in yards on their inability to hire enough rail workers.

From wire reportsCustomer complaints about deteriorating service led the Surface Transportation Board, which regulates the industry, to hold hearings earlier this year and order railroads to issue weekly reports on their operations.

Union Pacific’s shares fell less than 1% to $212.94 at 9:47 a.m. Thursday in New York.

The stock was down about 15% this year through Wednesday’s close.

Increased prices and higher fuel surcharges helped drive up second-quarter revenue by 14% to $6.27 billion even as carloads fell 1.4%.

Analysts had expected sales of $6.12 billion. Earnings were $2.93 a share, helped in part by share buybacks, more than the $2.84 a share analysts had predicted.

The worker shortage isn’t likely to ease anytime soon after the railroads and unions, which represent about 115,000 rail workers, hit an impasse on a labor agreement, which forced President Joe Biden to intervene last week by announcing a presidential panel to resolve the conflict.