U.S. weekly new jobless claims fall more than expected
The number of Americans filing new claims for unemployment benefits fell more than expected last week as disruptions from weather and temporary auto plant shutdowns faded. The Labor Department said Thursday that initial jobless claims fell by 10,000 to a seasonally adjusted 235,000 in the week ended July 20. Economists predict that the number of applicants this week will be 238,000.
The previous week, the number of applicants rose to the upper end of the range of 194,000-245,000 due to a surge in applications related to Hurricane Burr in Texas and temporary auto plant shutdowns. Despite the fluctuations, layoffs are still at historically low levels, and the slowdown in the labor market mainly comes from the reduction in employment caused by the Federal Reserve's aggressive interest rate hikes in 2022 and 2023, which will cool demand.
During the week of July 13, the number of people receiving unemployment benefits (the number of people continuing to receive unemployment benefits after initial claims, which can be used as an indicator of employment) fell by a seasonally adjusted 9,000 people to 1,851,000. The claims renewal data covers the period when the government surveyed the unemployment rate in July. The number of people renewing claims did not change much between the June and July survey weeks. As job opportunities declined, the U.S. unemployment rate rose to a 2.5-year high of 4.1% in June.
The U.S. Federal Reserve has maintained its benchmark overnight interest rate in a range of 5.25%-5.50% over the past year. Since 2022, it has raised interest rates by a cumulative 525 basis points to curb inflation. Financial markets expect the Federal Reserve to cut interest rates in September and again in November and December. Another report from the Commerce Department's Census Bureau showed that non-defense capital goods orders excluding aircraft orders, one of the important indicators of corporate investment plans, rebounded 1.0% in June after falling 0.9% in May.
