US weekly jobless claims fall to two-month low

US weekly jobless claims fall to two-month low

The number of Americans filing new claims for unemployment benefits unexpectedly decreased last week, reaching the lowest level in two months. This occurred despite ongoing labor market tightness and efforts by the Federal Reserve to slow demand. According to the Labor Department, initial claims for state unemployment benefits dropped by 9,000 to a seasonally adjusted 228,000 for the week ending July 15. This is the lowest level since mid-May, surpassing economists’ forecast of 242,000 claims for the week.

Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York, stated that the claims data demonstrate the resilience of the labor market and the fact that businesses have not yet started laying off workers rapidly, despite a five-percentage-point tightening. Unadjusted claims also fell by 326 to 257,976 last week. However, there were notable increases in claims in California and Georgia, while there were significant declines in Michigan, Kentucky, Indiana, New York, New Jersey, Iowa, and Illinois.

Although the labor market remains tight, the drop in claims last week may have been exaggerated due to difficulties in adjusting the data for seasonal patterns. Automakers typically idle plants in July to prepare for new models, but these closures do not always occur simultaneously, which can disrupt the model used by the government to remove seasonal fluctuations from the data. Nevertheless, claims, relative to the size of the labor market, remain well below the level of 280,000 that economists believe would indicate a significant slowdown in job growth.

Despite the economy slowing down amid the Federal Reserve’s interest rate increases, the labor market remains tight as companies hold onto workers after struggling to find labor during the COVID-19 pandemic. The Federal Reserve, which has raised its policy rate by 500 basis points since March 2022, is expected to resume hiking rates next month after skipping an increase in June.

The claims data covered the week in which the government surveyed businesses for the nonfarm payrolls component of July’s employment report. Claims decreased during the survey weeks in June and July. In June, the economy added 209,000 jobs.

The claims report also revealed that the number of people receiving benefits after an initial week of aid, which serves as a proxy for hiring, increased by 33,000 to 1.754 million during the week ending July 8. However, these continuing claims are still low compared to historical standards, indicating that some laid-off workers are finding new employment quickly.

Overall, the latest data on jobless claims suggests that the labor market remains resilient, with a decrease in new claims and a relatively low number of continuing claims.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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