The number of Americans filing new claims for unemployment benefits fell more than expected last week.
However, volatility at this time of year, when automakers are closing factories, makes it harder to get a clear view of the labor market.
Initial jobless claims fell by 17,000 in the week ended July 6 to a seasonally adjusted 222,000, the lowest level since late May, the Labor Department said Thursday. Economists polled by Reuters had expected 236,000 claims last week.
The order data included the Independence Day holiday. Orders tend to be volatile during the holidays, and automakers typically close assembly plants starting the week of July 4 to retool for new models.
However, timing can vary from manufacturer to manufacturer, which could confuse the model the government uses to smooth out seasonal fluctuations.
While this is likely adding noise to the aid claims data, there are growing signs that the labor market is losing momentum as the Federal Reserve’s steep interest rate hikes in 2022 and 2023 dampen economic activity.
Federal Reserve Chairman Jerome Powell this week flagged risks to the labor market, telling lawmakers that “we’ve seen a significant slowdown.”
Financial markets believe that this, combined with easing inflationary pressures, has opened the door for the US central bank to begin cutting interest rates in September.
Source: Terra
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