WASHINGTON: The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting an orderly labor market slowdown remained in place, though laid-off workers are finding it a bit difficult to land new jobs.
Initial claims for state unemployment benefits dropped 7,000 to a seasonally adjusted 227,000 for the week ended Aug. 10, the Labor Department said on Thursday. Economists polled by Reuters had forecast 235,000 claims for the latest week.
A jump in the unemployment rate to near a three-year high of 4.3% in July stoked fears of a labor market deterioration, with financial markets betting that the Federal Reserve could cut interest rates by 50 basis points next month. Layoffs, however, remain low by historic standards.
The fourth straight monthly rise in the jobless rate was driven by an immigration-induced increase in labor supply, which is not being matched by hiring. Businesses have scaled back on hiring as the 525 basis points worth of rate hikes from the U.S. central bank in 2022 and 2023 curb demand.
The Fed has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for a year.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 7,000 to a seasonally adjusted 1.864 million during the week ending Aug. 3, the claims report showed. The so-called continued claims are near levels last seen in late 2021, indicating that more people are experiencing longer bouts of unemployment. - Reuters
