WASHINGTON, Aug 8 — The number of Americans filing applications for unemployment benefits unexpectedly fell last week, suggesting the labour market remains strong even as the economy is slowing.
Initial claims for state unemployment benefits declined 8,000 to a seasonally adjusted 209,000 for the week ended August 3, the Labour Department said today. Data for the prior week was revised to show 2,000 more applications received than previously reported.
Last week’s drop in claims pushed them to the lower end of their 193,000-244,000 range for this year. Economists polled by Reuters had forecast claims would be unchanged at 215,000 in the latest week. The Labour Department said only claims for Idaho were estimated last week.
The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, edged up 250 to 212,250 last week.
US stock index futures held gains after the release of the data. Prices of US Treasuries dipped while the dollar was trading slightly higher.
Claims will be watched over the coming weeks for signs that deteriorating trade relations between the United States and China, which have dimmed the economy’s outlook and roiled financial markets, were spilling over to the labour market.
Concerns over the impact of the bitter trade war between Washington and Beijing on the US economic expansion, the longest on record, prompted the Federal Reserve to cut interest rates last week for the first time since 2008.
With tensions between the two economic giants escalating in recent days and recession risks rising, financial markets have fully priced in another rate cut next month. Expectations for a 50-basis-point cut at the Fed’s September 17-18 policy meeting have also risen.
While hiring has slowed, the pace of job gains remains well above the roughly 100,000 needed per month to keep up with growth in the working-age population.
Nonfarm payrolls increased by 164,000 jobs in July, down from 193,000 in June. Job growth over the last three months averaged 140,000 per month, the lowest in nearly two years, compared to 223,000 in 2018. The moderation in employment growth partly reflects a shortage of workers.
The economy grew at a 2.1 per cent annualised rate in the second quarter, slowing from the first quarter’s brisk 3.1 per cent pace. Growth is seen below a 2.0 per cent rate in the July-September quarter.
Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid dropped 15,000 to 1.68 million for the week ended July 27. The four-week moving average of the so-called continuing claims fell 11,000 to 1.69 million. — Reuters