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Applications For U.S. Jobless Benefits Fall To Lowest Since May

Initial unemployment claims decreased by 6,000 to 222,000 in the week ended Sept. 3, lower than all estimates.

Applications for US Jobless Benefits Fall to Lowest Since May
Applications for US Jobless Benefits Fall to Lowest Since May

Applications for US unemployment insurance fell for a fourth straight week to the lowest since May, suggesting demand for workers remains healthy despite an uncertain economic outlook.

Initial unemployment claims decreased by 6,000 to 222,000 in the week ended Sept. 3, lower than all estimates, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 235,000 new applications.

The four-week moving average, which smooths out volatile week-to-week moves, fell to 233,000 -- the lowest since early July.

Applications For U.S. Jobless Benefits Fall To Lowest Since May

Continuing claims for state benefits rose 36,000 to 1.47 million in the week ended Aug. 27.

After some choppiness over many of the summer months, unemployment claims have been trending down in recent weeks, consistent with a tight labor market. The US added more than 300,000 jobs in August and openings remain near a record, indicating a strong appetite for hiring.

WATCH: US initial jobless claims decreased by 6,000 to 222,000 in the week ended Sept. 3, lower than all estimates.Source: Bloomberg
WATCH: US initial jobless claims decreased by 6,000 to 222,000 in the week ended Sept. 3, lower than all estimates.Source: Bloomberg

Job growth may slow, however, as the Federal Reserve continues on an aggressive path of interest-rate hikes to tame decades-high inflation. Chair Jerome Powell said in a speech last month that the labor market is “clearly out of balance,” as demand for workers far exceeds supply. He’s due to speak again later this morning.

“These timely data are signaling that the labor market is still strong, with layoffs declining, even as the Fed is tightening aggressively to rebalance supply and demand,” Rubeela Farooqi, chief US economist at High Frequency Economics, said in a note. “Having faced severe labor shortages, businesses are likely reluctant to let go of workers, for now.”

Some companies, particularly in the housing and technology sectors, are already scaling back hiring efforts. Citigroup Inc. joined rivals in trimming the ranks of its mortgage workforce, while tech investment firm SoftBank Group Corp. is cutting positions in the US among other regions.

On an unadjusted basis, initial claims increased by almost 2,000 to 175,842 last week. Filings rose the most in Massachusetts and Oklahoma. New York and Michigan posted the largest declines after increases in the prior week. Claims were estimated in the latest week for four states.

(Adds economist’s comment)

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