Initial applications for U.S. unemployment benefits jumped to the highest level in almost a year, adding to evidence that the labor market is slowing.

Initial claims increased by 14,000 to 249,000 in the week ended July 27, according to Labor Department data released Thursday. The median forecast in a Bloomberg survey of economists called for 236,000 applications. Michigan and Missouri were among states with large gains.

Continuing claims, a proxy for the number of people receiving unemployment benefits, also rose to 1.88 million in the week ended July 20, the highest since November 2021. The claims data are prone to big weekly swings this time of year, which include school closures and retooling at auto factories.

The number of Americans seeking and receiving employment benefits has risen in recent months after hovering near historic lows for most of the previous two years. Hiring has slowed and by many measures the labor market has come back to pre-pandemic levels.

Federal Reserve Chair Jerome Powell said Wednesday that there are increasing risks to the labor market, noting that job growth has moderated and the unemployment rate has moved up. But the jobless rate remains historically low and data from the first half isn’t signaling a weak economy, he said at a press conference following the central bank’s two-day meeting.

The four-week moving average, which helps smooth short-term fluctuations in weekly claims figures, increased by 2,500 to 238,000.

Initial claims, before adjustment for seasonal influences, fell by about 10,000 to 215,827. Texas saw the largest decline.

Jobless claims have been displaying typical summer seasonality within a clear upward trend, Eliza Winger of Bloomberg Economics said in a note. The rise in recurring applications will add to upward pressure on the unemployment rate, she said.

Separate U.S. data Thursday showed worker productivity increased in the second quarter by more than forecast, helping temper growth in labor costs. Treasury yields fell while stock futures remained higher following the reports.

Summer job cuts remain low, based on the latest data from executive coaching firm Challenger, Gray & Christmas Inc. U.S.-based employers announced 25,885 layoffs in July, up 9% from a year earlier. Apart from the manufacturing sector, most industries are below last year’s levels, according to Challenger.

Hiring plans announced so far this year are the lowest since 2012, Challenger data show.

Economists are expecting moderation in job growth in the government’s July employment report due Friday. Forecasters anticipate the unemployment rate remained steady at 4.1%.

—With assistance from Charles Ayitey.

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