The number of Americans filing new claims for unemployment benefits fell more than expected last week, suggesting fears that the labor market was crumbling were overblown and its gradual weakening remains intact.
Initial claims for state unemployment benefits fell 17,000 to 233,000 in the week ended Aug. 3, the Labor Department reported Thursday. It was the biggest drop in 11 months. Economists polled by Reuters had expected the number to fall by 240,000.
Jobless claims are a reflection of layoffs, and while they have risen recently, they remain at historically healthy levels.
Claims have been trending upward somewhat since June, with part of the increase attributed to volatility related to temporary closures of motor vehicle factories for retooling and disruptions caused by Hurricane Beryl in Texas.
Thursday’s report is the latest sign of the U.S. labor market since last week’s deeply disappointing data — which showed the lowest number of new jobs created in two years and a rise in the unemployment rate to 4.3 percent in July — sent financial markets into a tailspin on fears the economy could be heading toward a recession.
In recent days, however, most economists have cautioned that the July jobs report does not portend a recession. They noted that by most measures the economy, while slowing, remains resilient.
The U.S. central bank last week kept its benchmark overnight interest rate in the 5.25-5.50 percent range, where it has been since July last year, but policymakers signaled their intention to cut borrowing costs at their next meeting in September.
Most analysts also expect central bank policymakers to begin cutting their benchmark rate when they meet in mid-September.
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– 2024-08-16 17:42:25
