The number of Americans filing new claims for unemployment benefits fell last week as layoffs remained low, potentially helping to allay fears that the labor market is deteriorating.
Initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 227,000 in the week ended Aug. 31, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.
Applications had been hovering around the 230,000 level since retreating from an 11-month high in late July as seasonal disruptions from the auto industry and Hurricane Beryl faded. They continue to show no signs of labor market deterioration, even as job openings fell to a 3-1/2-year low in July.
The Federal Reserve’s “Beige Book” report released Wednesday described employment levels as “generally stable or slightly up in recent weeks.” It noted that “some (Federal Reserve) districts reported that firms cut shifts and hours, left advertised positions vacant, or reduced headcount through attrition, although reports of layoffs remained rare.” It added, however, that “candidates faced increasing difficulties and longer times to land a job.”
The slowdown in the labor market, marked by a sharp drop in hiring, has put on the table a 50 basis point cut in interest rates at the US central bank’s meeting on September 17 and 18.
Economists, however, believe the US central bank will kick off its easing cycle with a quarter-percentage-point rate cut because domestic demand remains robust.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell by 22,000 to a seasonally adjusted 1.838 million during the week ended Aug. 24, the claims report showed.
So-called continuing claims are near levels last seen in late 2021, consistent with longer periods of joblessness.
The claims data is unrelated to the August jobs report, scheduled for release on Friday, as it falls outside the survey period.
Nonfarm payrolls likely rose by 160,000 jobs last month after rising 114,000 in July, according to a Reuters poll of economists. The unemployment rate is expected to fall to 4.2 percent from a nearly three-year high of 4.3 percent in July.
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