The number of Americans filing new claims for unemployment benefits fell last week and data for the prior period was revised sharply down, suggesting labor market conditions remain tight, though higher interest rates are slowing momentum.
The weekly unemployment claims report from the Labor Department on Thursday added to strong industrial production in July and underlying retail sales growth in allaying fears that the economy was in recession. The claims report, the most timely data on the economy’s health, could give the Federal Reserve ammunition to deliver another hefty rate hike next month.
“Fears of broad-based layoffs have yet to materialize,” said Mahir Rasheed, a U.S. economist at Oxford Economics in New York. “Still, we doubt claims will accelerate sharply as labor demand remains well ahead of labor supply, while the outlook for the economy remains relatively positive despite elevated uncertainty regarding inflation and growth.”
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.
Click here to see the full report from Lucia Matikani at Yahoo Finance.