U.S. applications for unemployment benefits held near the lowest levels of the year, underscoring resilient demand for workers.
Initial claims for unemployment benefits ticked up by 6,000 to 227,000 in the week ending July 29, according to Labor Department data released Thursday. The median estimate in a Bloomberg survey of economists called for 225,000 applications.
Continuing claims, which include those who have received benefits for longer than one week, edged higher to 1.7 million in the week through July 22.
The initial claims data can be particularly volatile in the summer months as automakers close for their annual retooling period. The four-week moving average, which smooths out some of that volatility, fell to 228,250, the lowest since March.
The low level of claims highlights what’s still a strong labor market, marked by historically low unemployment and layoffs. However, some signs of softness are emerging, like decelerating wage growth and fewer job openings.
A separate report Thursday showed U.S. labor productivity logged its biggest increase in the second quarter in nearly three years, helping to offset rising labor costs.
The data precede Friday’s employment report, which is forecast to show the U.S. added 200,000 jobs in July. While that’d be the weakest print since the end of 2020, it’s still a strong advance historically.
Another report Thursday from Challenger, Gray & Christmas Inc. showed an 8% decline in job cuts announced by U.S.-based employers in July from a year earlier. It marked the first annual decrease since May 2022 and suggests employers are reluctant to reduce headcount amid healthy demand.
“The job market is remaining resilient in the face of rising interest rates, as consumers continue to spend and inflation falls,” said Andy Challenger, senior vice president at the firm. “Companies, weary of letting go of needed workers, are finding other ways to cut costs.”
On an unadjusted basis, claims fell to 205,012, the lowest in about two months and was led by Ohio, California and Georgia. Applications in Missouri rose by the most since early May.
What Bloomberg Economics Says…
“The marginal increase in seasonally adjusted unemployment insurance claims masks a return to work evident in the unadjusted data. That said, rehiring of temporarily idled workers has been slower than anticipated, reflecting some incremental softening of the labor market.”
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