The number of Americans filing new applications for jobless benefits unexpectedly fell last week, suggesting employers may be holding on to workers despite other indications of a cooling labor market.
Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 227,000 for the week ended July 4, the Labor Department said Thursday.
Economists polled by Reuters had forecast 235,000 claims for the latest week. The data included last week’s July Fourth holiday and claims tend to be volatile around public holidays.
Economists and U.S. central bankers have generally viewed the labor market as solid, if weakening somewhat. This is a view reinforced by last week’s monthly jobs report that showed the unemployment rate ticking down to 4.1%, though largely because the workforce shrank, and a bigger-than-expected gain of 147,000 jobs, though highly concentrated in just a few sectors.
Fed Chair Jerome Powell has noted that in the current low-hiring and low-firing environment, any increase in layoffs could rapidly push up the unemployment rate. So far that has not happened, though nearly 100 U.S. companies have announced layoffs this month, including Microsoft and Intel. Economists say President Donald Trump’s still unsettled tariff policy is making it difficult for businesses to plan ahead.
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Author: Dillon B
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