The number of Americans filing new claims for unemployment benefits fell last week, as labour market conditions remained tight despite the Federal Reserve’s aggressive interest rate hikes.
Initial claims for state unemployment benefits decreased by 10,000 to a seasonally adjusted 230,000 for the week ended Aug. 19, the Labor Department said on Thursday. The previous week’s level was revised up modestly by 1,000. Economists polled by Reuters had forecast 240,000 claims for the latest week.
The labour market is continuing to defy expectations in the face of the Fed’s aggressive interest hikes since March 2022, as employers hoard workers after struggling to find labour during the COVID-19 pandemic. Labor market strength and receding inflation are fanning optimism that the economy could avoid a recession.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 9,000 to 1.702 million during the week ending Aug. 12, the claims report showed. These so-called continuing claims remain low by historical standards, indicating that some laid-off workers are experiencing short spells of unemployment.