The number of Americans filing new claims for unemployment benefits fell last week, pointing to underlying strength in the labor market that continues to support the economy.
Initial claims for jobless benefits fell by 8,000 to a seasonally adjusted 215,000 for the week ending May 18, the Labor Department said on Thursday. Economists polled by Reuters had forecast 220,000 claims in the latest week.
The labor market is gradually rebalancing following a 525 basis point increase in interest rates from the Federal Reserve from March 2022 to slow demand in the overall economy. Minutes of the US central bank's April 30-May 1 policy meeting published on Wednesday showed policymakers assessed that "demand and supply in the labor market, overall, are becoming more balanced, albeit at a slower pace." But they also noted that conditions "remain generally tight."
The Fed has kept its benchmark overnight interest rate in the 5.25%-5.50% range since July. Financial markets expect the first rate cut to come in September.
These claims data cover the period in which the government surveyed employers for the non-farm payroll employment component in the May employment report. Claims were virtually unchanged between the April and May survey weeks. Next week's data referring to the number of people receiving benefits after the first week of aid, which is an indicator of employment, could provide more clarity on the state of the labor market.
Continuing claims rose 8,000 to a seasonally adjusted 1.794 million for the week ended May 11, according to the claims report.
