Initial applications for US unemployment benefits fell for a second week to the lowest level since early July, despite a recent pullback in hiring.
Initial claims decreased by 7,000 to 227,000 in the week ended Aug. 10, according to Labor Department data released Thursday. The median forecast in a Bloomberg survey of economists called for 235,000 applications.
Economists and investors are on the watch for signs that the labor market may be weakening faster than anticipated after the July employment report showed the jobless rate rose for a fourth month and hiring slowed. First-time applications for unemployment benefits have trended up this year but remain subdued near 2019 levels.
Continuing claims, a proxy for the number of people receiving unemployment benefits, also declined, to 1.86 million, in the week ended Aug. 3.
The moderation in the job market, alongside recent improvement in inflation, reinforces the case for the Federal Reserve to lower interest rates next month during its September policy meeting. The July consumer price index report Wednesday showed that underlying US inflation eased for a fourth month on an annual basis.
Jobless claims data can be noisy from week to week, especially at this time of year when they’re prone to swings due to school closures for summer break. The four-week moving average, a closely-watched metric that helps smooth out the data, fell to 236,500.
Initial claims, before adjustment for seasonal factors, dropped by 4,500 to 199,530. California, Texas and Massachusetts saw the largest declines.
–With assistance from Mark Niquette.
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