The number of Americans filing new applications for unemployment benefits fell more than expected last week as weather disruptions and temporary shutdowns of auto plants eased.
Initial claims for state jobless benefits fell by 10,000 to a seasonally adjusted 235,000 for the week ended July 20, the Labor Department reported on Thursday. Economists polled by Reuters had forecast 238,000 claims for the latest week.
Claims had risen in the previous week to the upper end of the 194,000-245,000 range for the year, driven by a surge in claims in Texas related to disruption from Hurricane Beryl. The temporary closure of automotive factories for renovations also contributed to the increase.
Through this volatility, layoffs remain low by historical standards and the slowdown in the labor market is mostly due to reduced hiring as aggressive interest rate hikes by the Federal Reserve in 2022 and 2023 cool demand.
The number of people receiving benefits after the first week of aid, a proxy for hiring, fell by 9,000 to a seasonally adjusted 1.851 million in the week ended July 13, based on the claims report.
This continuous claims data covers the period in which the government surveyed households for the unemployment rate in July. Continued claims did not change much between the June and July survey weeks.
The unemployment rate rose to a 2-1/2-year high of 4.1% in June as jobs became scarcer than last year.
The US central bank has kept overnight interest rates at the current range of 5.25%-5.50% for the past year. It has raised the key rate by 525 basis points since 2022 to curb inflation.
Financial markets expect a rate cut in September followed by additional cuts in November and December.
A separate report from the Commerce Department's Census Bureau showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1.0% in June after falling 0.9% in May.
