Last week, the number of Americans filing initial applications for unemployment benefits dropped more than anticipated, adding to the uncertainty over the labor market’s condition as the U.S. Fed evaluates monetary policy.
For the week that ended on August 3, first-time claims for state unemployment benefits dropped by 17K to a seasonally adjusted 233K. Economists had expected 241K claims for the week.
The previous week, claims had been at a revised 250K, the highest level since Aug. 2023.
The number of people receiving benefits after the first week of assistance, called continuing claims, rose by 6K to a seasonally adjusted 1.875M.
For the past year, the U.S. Fed has kept its benchmark overnight interest rate at the range of between 5.25% and 5.50%.
Last week, Fed Chair Jerome Powell said that although he saw the labor market changes as generally consistent with normalization, policymakers were monitoring it closely to determine whether it begins to show indications that it was more than that.
Last week, the monthly jobs report showed that job growth in the U.S. in July slowed more than anticipated, with only 114K jobs added, while the unemployment rate rose to 4.3%.
This resulted in increased expectations that the Fed would begin easing policy in Sept., possibly with a big 0.5% interest rate cut.
