OAN Staff James Meyers
8:20 AM – Thursday, August 8, 2024
The number of Americans filing new applications for unemployment benefits fell more than expected last week, easing fears of an unraveling labor market for now.
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The Labor Department said on Thursday that jobless claims fell 17,000 to a seasonally adjusted 233,000 for the week ending August 3rd, which is the largest drop in almost a year.
Economists had predicted 240,000 claims for the latest week.
The latest unemployment claims come after Friday’s weak jobs report that revealed hiring slowed down at an alarming rate, causing calls for the Federal Reserve to cut rates before its next meeting scheduled in September.
Claims over the last few weeks have been on the cusp of the high end range this year, but layoffs remain low.
Government data last week showed the layoffs rate in June was the lowest in almost two years. The slowdown in the labor market is being driven by less aggressive hiring as the Fed’s interest rate hikes in 2022 and 2023.
Meanwhile, strong consumer demand and a resilient labor market have averted a recession that many economists have forecasted during the extended flurry of rate hikes by the Federal Reserve that began in March 2022.
Additionally, interest rate futures contracts reflect a close to 70% probability that the Fed will start cutting borrowing costs in September with a higher than normal 50 basis point reduction.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 6,000 to a seasonally adjusted 1.875 million during the week ending in July 27th, the latest claims report revealed.
The four-week average of claims rose by 2,500 to 238,000.
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