The number of Americans filing new claims for unemployment benefits fell last week and data for the prior period was revised sharply down, suggesting labour market conditions remain tight, though higher interest rates are slowing momentum.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 250,000 for the week ended Aug. 13. Data for the prior week was revised to show 10,000 fewer claims filed than previously reported. Economists polled by Reuters had forecast 265,000 applications for the latest week.
Companies in the interest rate-sensitive housing and technology industries have been laying off workers in response to slowing demand caused by the Fed’s aggressive monetary policy tightening campaign to tame inflation. But elsewhere, businesses are hungry for workers. There were 10.7 million job openings at the end of June, with 1.8 openings for every unemployed worker.
“The coast is clear for Fed officials to keep on pushing on interest rates to slow the economy because the earliest indicators showing distress in the labour market are not definitive on whether a recession is weeks away or months away or even coming at all,” said Christopher Rupkey, chief economist at FWDBONDS in New York.