The number of new unemployment benefit applications in the US increased slightly to 230,000 for the week ending September 7, according to the latest data from the Labor Department.
This figure aligns with economists’ expectations and marks a 2,000-claim rise from the previous week’s total of 228,000.
The modest increase reflects a continuing trend of a cooling job market, following a period of high hiring activity. The data for last week includes the Labor Day holiday, a period known for increased volatility in jobless claims. Despite this uptick, the number of claims has stabilized since falling from an 11-month high of 250,000 in late July.
Recent government figures revealed a slower-than-anticipated increase in nonfarm payrolls for August, although the unemployment rate decreased slightly to 4.2% from 4.3% in July. The Federal Reserve’s previous aggressive interest rate hikes, aimed at curbing inflation, have contributed to a slowdown in hiring. Since 2022, the Fed has raised its benchmark interest rate by 525 basis points, bringing it to the current range of 5.25%-5.50%.
The central bank has kept rates steady over the past year, hoping to balance the economy amid easing inflation. Expectations for an interest rate cut have fluctuated, with recent core inflation data leading traders to anticipate a 25-basis point reduction at the Fed’s upcoming meeting in mid-September, rather than the larger cut some had hoped for.
The number of people continuing to receive unemployment benefits also rose slightly by 5,000 to 1.85 million for the week ending August 31. This indicator, which reflects ongoing labor market challenges, has stabilized since a notable spike in July.
While layoffs have been reported by several major companies, the overall job market remains resilient. New claims data showed a drop in unadjusted filings to 177,663, the lowest level in nearly a year. Moreover, 40 out of 53 states reported declines in new claims, suggesting a relatively stable job market.
Looking ahead, the labor market’s softening trends provide the Fed with room to proceed cautiously with interest rate adjustments. However, if job market conditions deteriorate further, the central bank may consider more substantial rate cuts.
New York Post and Market Watch contributed to this report.
