WASHINGTON, July 3 Reuters The number of Americans filing new claims for unemployment benefits increased last week, pointing to easing labor market conditions.

Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 238,000 for the week ended June 29, the Labor Department said on Wednesday. The report was released a day early because of the Independence Day holiday on Thursday.

Economists polled by Reuters had forecast 235,000 claims in the latest week.

Claims have moved to the upper end of their 194,000243,000 range of this year, in part because of a rise in layoffs as higher interest rates dampen demand as well as difficulties adjusting the data for seasonal fluctuations during holidays.

Volatility could persist after the July 4 holiday. Auto manufacturers typically idle assembly plants for retooling in the summer, but the timing is uncertain.

The labor market is steadily cooling, with the government reporting on Tuesday that there were 1.22 job openings for every unemployed person in May. The vacancytounemployment ratio is close to its average of 1.19 in 2019.

Federal Reserve Chair Jerome Powell said on Tuesday that the economy was back on a disinflationary path, but policymakers needed more data before cutting rates.

Financial markets remain optimistic that the U.S. central bank could start its easing cycle in September.

The Fed has maintained its benchmark overnight interest rate in the current 5.255.50 range since last July. It has…