US jobless claims fall as labor market remains tight

The number of Americans filing new unemployment claims declined last week, indicating that labour market conditions remained tight despite the Federal Reserve’s aggressive rate hikes.

The Labour Department said on Thursday that initial claims for state unemployment benefits fell by 10,000 to a seasonally adjusted 230,000 for the week ending Aug. 19. The prior week’s level was raised by 1,000 points. Reuters polled economists, who predicted 240,000 claims for the most recent week.

As companies stockpile people after failing to locate labour during the COVID-19 pandemic, the labour market continues to defy expectations in the face of the Fed’s rapid interest hikes since March 2022. Labour market strength and falling inflation fuel hopes that the economy will avoid a recession.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased 9,000 to 1.702 million during the week ending Aug. 12, the claims report showed. These so-called continuing claims remain low by historical standards, indicating that some laid-off workers are experiencing short spells of unemployment.