The number of Americans filing for unemployment benefits fell last week as the labor market continued to grow despite higher interest rates to dampen hiring.
US job claims fell by 9,000 to 228,000 for the week ended July 15, compared to 237,000 the previous week, the Labor Department reported on Thursday.
The four-week moving average of claims, which smoothed out some of the weekly volatility, fell by 9,250 to 237,500.
Unemployment claims are considered to reflect the number of job losses in a given week.
For three weeks in late May and early June, jobless claims appeared to hit a sustained high, above 260,000. But in the last four weeks, claims have eased and the labor market continues to be historically healthy.
Since more than 20 million jobs were lost when the COVID-19 pandemic hit in the spring of 2020, US employers have added jobs at such a rapid rate, more often than not exceeding expectations. Despite the fastest interest rate since 1989, the unemployment rate has barely changed and remains historically low at 3.6%.
Fed officials have indicated that the unemployment rate would need to rise well above 4% to lower inflation, but reports last week showed that consumer prices fell to their lowest level since the start of 2021 – 3% in June compared with a year earlier – and were closer to the Fed's target of 2%.
The US economy has generally shown resilience in the face of an aggressive rate hike campaign by the Federal Reserve in an effort to quell sustained inflation not seen since the early 1980s.
The US economy grew at an annual rate of 2% from January to March. Along with a strong labor market, most economists now expect Fed officials to hike interest rates one or two more times by the end of the year in an effort to fight inflation.
In June, the Fed chose not to raise the central bank's benchmark lending rate for the first time in 15 months, although some officials said they expected a half-point increase to rates by the end of the year.
There have been some notable job cuts recently, mostly in the technology sector, with many companies saying they are taking jobs ahead of the pandemic.
IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn, Spotify, and DoorDash have all announced job cuts this year. Amazon and Facebook's parent company, Meta, have both announced several job cuts since November.
Outside of the tech sector, McDonald's, Morgan Stanley, and 3M have also recently cut jobs. In total, 1.75 million people were receiving unemployment benefits for the week ending July 8, about 33,000 more than the previous week.
