US Jobless Claims Fall to 2-Month Low, Layoffs Remain Low
By Rediff Money Desk, Washington Sep 05, 2024 18:51
US jobless claims fell to a 2-month low last week, indicating layoffs remain low despite labor market cooling. The report could influence the Federal Reserve's plans for interest rate cuts.
![US Jobless Claims Fall to 2-Month Low, Layoffs Remain Low](https://im.rediff.com/news/2024/jun/20job.jpg)
Photograph: Saurabh Sharma/Reuters
Washington, Sep 5 (AP) The number of Americans filing for unemployment benefits fell to its lowest level in two months last week, signalling that layoffs remain relatively low despite other signs of labour market cooling.
Jobless claims fell by 5,000 to 227,000 for the week of Aug 31, the Labour Department reported Thursday. That's the fewest since the week of July 6, when 223,000 Americans filed claims. It's also less than the 230,000 new filings that analysts were expecting.
The four-week average of claims, which evens out some of the week-to-week volatility, fell by 1,750 to 230,000. That's the lowest four-week average since early June.
Weekly filings for unemployment benefits, considered a proxy for layoffs, remain low by historic standards, though they are up from earlier this year.
During the first four months of 2024, claims averaged a historically low 213,000 a week. But they started rising in May. They hit 250,000 in late July, adding to evidence that high interest rates were finally cooling a red-hot US job market.
Employers added just 114,000 jobs in July, well below the January-June monthly average of nearly 218,000. The unemployment rate rose for the fourth straight month in July, though it remains relatively low at 4.3%.
Economists polled by FactSet expect Friday's August jobs report to show that the US added 160,000 jobs, up from 114,000 in July, and that the unemployment rate dipped to 4.2% from 4.3%. The report's strength, or weakness, will likely influence the Federal Reserve's plans for how much to cut its benchmark interest rate.
Last month, the Labour Department reported that the US economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total supports evidence that the job market has been steadily slowing and reinforces the Fed's plan to start cutting interest rates later this month.
The Fed, in an attempt to stifle inflation that hit a four-decade high just over two years ago, raised its benchmark interest rate 11 times in 2022 and 2023. That pushed it to a 23-year high, where it has stayed for more than a year.
Inflation has retreated steadily, approaching the Fed's 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
Traders are forecasting the Fed will cut its benchmark rate by a full percentage point by the end of 2024, which would require it to cut the rate by more than the traditional quarter of a percentage point at one of its meetings in the next few months.
Thursday's report also showed that the total number of Americans collecting jobless benefits declined by 22,000 to 1.84 million for the week of Aug 24.
Jobless claims fell by 5,000 to 227,000 for the week of Aug 31, the Labour Department reported Thursday. That's the fewest since the week of July 6, when 223,000 Americans filed claims. It's also less than the 230,000 new filings that analysts were expecting.
The four-week average of claims, which evens out some of the week-to-week volatility, fell by 1,750 to 230,000. That's the lowest four-week average since early June.
Weekly filings for unemployment benefits, considered a proxy for layoffs, remain low by historic standards, though they are up from earlier this year.
During the first four months of 2024, claims averaged a historically low 213,000 a week. But they started rising in May. They hit 250,000 in late July, adding to evidence that high interest rates were finally cooling a red-hot US job market.
Employers added just 114,000 jobs in July, well below the January-June monthly average of nearly 218,000. The unemployment rate rose for the fourth straight month in July, though it remains relatively low at 4.3%.
Economists polled by FactSet expect Friday's August jobs report to show that the US added 160,000 jobs, up from 114,000 in July, and that the unemployment rate dipped to 4.2% from 4.3%. The report's strength, or weakness, will likely influence the Federal Reserve's plans for how much to cut its benchmark interest rate.
Last month, the Labour Department reported that the US economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total supports evidence that the job market has been steadily slowing and reinforces the Fed's plan to start cutting interest rates later this month.
The Fed, in an attempt to stifle inflation that hit a four-decade high just over two years ago, raised its benchmark interest rate 11 times in 2022 and 2023. That pushed it to a 23-year high, where it has stayed for more than a year.
Inflation has retreated steadily, approaching the Fed's 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
Traders are forecasting the Fed will cut its benchmark rate by a full percentage point by the end of 2024, which would require it to cut the rate by more than the traditional quarter of a percentage point at one of its meetings in the next few months.
Thursday's report also showed that the total number of Americans collecting jobless benefits declined by 22,000 to 1.84 million for the week of Aug 24.
Source: ASSOCIATED PRESS
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- Rama Steel Tubes
- 13.90 (+ 19.93)
- 46154007
- GACM Technologies
- 1.65 ( -4.62)
- 27306959
- Vodafone Idea L
- 15.09 (+ 1.75)
- 23474154
- Sunshine Capital
- 2.55 (+ 4.94)
- 22635578
- GTL Infrastructure
- 2.55 ( -1.54)
- 20184737
MORE NEWS
![Odisha Govt...](https://im.rediff.com/80-80/money/2024/apr/11ev.jpg)
Odisha Govt Subsidizes EV Owners with Rs 154 Cr
The Odisha government has provided over Rs 154 crore in subsidies to electric vehicle...
Ultra Media & Entertainment Invests Rs 500 Cr,...
Ultra Media & Entertainment Group announces Rs 500 crore investment to launch two new...
![Digital...](https://im.rediff.com/80-80/money/2020/sep/18farmer.jpg)
Digital Agriculture Mission Criticized: AIKS...
The All India Kisan Sabha (AIKS) criticizes the Digital Agriculture Mission, fearing it...