Unemployment support applications slow down
Meanwhile, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting an orderly slowdown in the labor market remains in place, although laid-off workers are having some difficulty finding new jobs.
Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 227,000 in the week ended Aug. 10, the Labor Department said on Thursday. Economists polled by Reuters had forecast 235,000 claims for the latest week.
A surge in the unemployment rate in July, which approached a three-year high of 4.3%, stoked fears of a deteriorating labor market, and financial markets are betting the Federal Reserve could cut interest rates by 50 basis points next month. However, layoffs remain low by historical standards.
The fourth consecutive monthly increase in the unemployment rate was due to an immigration-induced increase in labor supply that was not matched by hiring. Businesses have cut back on hiring as the U.S. central bank’s 525-basis-point rate hikes from 2022 to 2023 dampened demand.
The Federal Reserve has kept its benchmark overnight interest rate in the current range of 5.25% to 5.50% for a year.
