The number of Americans filing new applications for unemployment benefits fell unexpectedly last week, showing that the labor market's decline is taking place regularly, even as laid-off workers are having little difficulty finding new jobs.
Initial claims for state jobless benefits fell by 7,000 to a seasonally adjusted 227,000 for the week ended Aug. 10, the Labor Department said on Thursday. Economists interviewed by Reuters had forecast 235,000 claims for the latest week.
A jump in the unemployment rate to a near three-year high of 4.3% in July raised concerns about a weakening labor market, with financial markets anticipating that the Federal Reserve may cut interest rates by 50 basis points next month. Still, layoffs remain low by historical standards.
The fourth consecutive monthly increase in the unemployment rate was driven by an increase in the labor supply caused by immigration, which was not offset by hiring. Businesses have cut back on hiring as interest rate hikes of 525 basis points by the US central bank in 2022 and 2023 curb demand.
The Fed has kept the benchmark overnight interest rate in the current range of 5.25%-5.50% for one year.
The number of people receiving benefits after the first week of aid, which is a proxy for hiring, fell 7,000 to a seasonally adjusted 1.864 million during the week ended Aug. 3, according to the claims report. These ongoing claims are close to levels last seen at the end of 2021, suggesting that more people are experiencing longer unemployment.
