Despite a recent slowdown in hiring, the number of initial applications for US unemployment benefits dropped for a second week to the lowest level since early July.
Despite a recent slowdown in hiring, the number of initial applications for US unemployment benefits dropped for a second week to the lowest level since early July.
Data issued on Thursday by the Labor Department shows that in the week ending August 10, initial claims fell by 7,000 to 227,000. In a Bloomberg survey of economists, the median prediction was for 235,000 applications.
Following the July employment data, which revealed that hiring slowed and the unemployment rate increased for a fourth month, investors and economists are looking for indications that the labor market may be faltering sooner than expected. Although they have increased this year, first-time applications for jobless benefits are still very low compared to 2019.
In the week ending August 3, continuing claims—a good indicator of the number of people receiving unemployment benefits—also decreased, coming in at 1.86 million.
According to a second data released on Thursday by the Commerce Department, there was a significant increase in US retail sales in July, the biggest since early 2023. Following a cyberattack on vehicle dealerships earlier this year, sales of cars saw a dramatic rebound. However, rises were also seen in the sales of gadgets and appliances, suggesting that consumers are holding up despite rising borrowing prices.
The reports caused a surge in the stock index and Treasury rates.
The recent improvement in inflation and the labor market’s slowing support the Federal Reserve’s decision to decrease interest rates during its September policy meeting next month. According to the July consumer price index report released on Wednesday, annualized US inflation declined for a fourth consecutive month.
“The most recent preliminary statistics on unemployment claims will allay worries about the labor market’s rapid decline. But it might be deceptive to evaluate labor market fundamentals only based on reports of unemployment.
Weekly fluctuations in unemployment claims statistics are common, particularly during this season when schools are out for summer vacation. A frequently used statistic that helps smooth out the data, the four-week moving average, dropped to 236,500.
Prior to accounting for seasonal variations, the number of initial claims decreased by 4,500 to 199,530. Massachusetts, Texas, and California saw the biggest drops.
