The number of Americans filing new applications for unemployment benefits increased marginally last week, pointing to a still-low level of layoffs even as the labour market slows.
Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 230,000 for the week ended Sept 7, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week. Last week’s data included the Labor Day holiday.
Claims tend to be volatile around public holidays. They have, however, been little changed since dropping from an 11-month high of 250,000 in late July. The slowdown in the labour market is being driven by businesses scaling back on hiring as higher interest rates curb demand throughout the economy.
Government data last week showed nonfarm payrolls increasing by less than expected in August but the unemployment rate falling to 4.2% from 4.3% in July.
Against the backdrop of the labour market slowdown, the Federal Reserve is expected to start its policy easing cycle next Wednesday, with a 25-basis points rate cut guaranteed after the annual increase in consumer prices slowed considerably in August, though some stickiness in inflation remained.
The central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for a year, having raised it by 525 basis points in 2022 and 2023.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 5,000 to a seasonally adjusted 1.850 million during the week ending Aug 31, the claims report showed.
The so-called continuing claims have mostly trended lower through August after surging in July to levels last seen in late 2021. The decline is consistent with the drop in the unemployment rate last month. – Reuters
