The US job market continued to show signs of slowing after 260,000 people filed for unemployment insurance, keeping initial jobless claims near the highest level since late last year.

What happened: Jobless claims rose 6,000 to 260,000 in the week ended July 30 from a downwardly revised level of 254,000 the previous week, according to Data released by the Department of Labor on Thursday.

The four-week moving average was 254,750, up 6,000 from the previous week’s revised average after the average was revised down 500 from 249,250 to 248,750.

Why it matters: The headline figure was in line with economists’ average estimates, but shows that the job market is still headed in the wrong direction. New jobless claims fell below 170k in late March before beginning to trend higher as the economy slowed.

The Federal Reserve is keeping a close eye on the jobs market as the central bank aims to cool off the hottest inflation numbers in more than 40 years. The Fed raised interest rates by 75 basis points for the second straight month last week, bringing its target federal funds rate to a range of 2.25% to 2.5%.

See also: Bill Ackman is hedging against what he calls “the biggest risk facing the markets.”

As part of a mid-year monetary policy report commissioned by Congress, the Fed Chair Jerome Powell testified before the Senate Banking Committee on inflation in June.

“In the months ahead, we will look for compelling evidence that inflation is moving in line with inflation returning to 2%,” Powell said. “We expect ongoing rate hikes to be reasonable. The pace of these changes will continue to depend on incoming data and the evolving outlook for the economy.”

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