The number of Americans who filed new applications for unemployment benefits fell last week as labor market conditions remain tight, although some slowdown is taking place.
In the week ending June 18, initial claims for state jobless benefits fell by 2,000 to a seasonally adjusted 229,000, the work Department. Economists polled by Reuters had forecast 227,000 claims for the latest week.
Jobless claims have been relatively flat since falling to 166,000 in March, their lowest level in 53 years, amid signs of cooling in the labor market.
There have been reports of job cuts, particularly in the technology and housing sectors, with the latter seeing a moderation in activity as mortgage rates rise in response to rising inflation expectations and aggressive rate hikes. the interest rates of the Federal Reserve.
However, the overall labor market remains tight. At the end of April there were 11.4 million job vacancies, with almost two vacancies for every one unemployed. Economists say subsidy applications would need to top 250,000 to help balance labor supply and demand and control wage inflation.
The US central bank raised its policy rate by three-quarters of a percentage point last week, its biggest hike since 1994. The Fed has raised its benchmark overnight rate by 150 basis points since March.
The Fed’s efforts to dampen demand in the labor market and the broader economy are fueling fears of a recession next year.
The chairman of the Fed, Jerome Powelltold lawmakers on Wednesday that the central bank is not trying to engineer a recession to curb inflation, but is fully committed to controlling prices, even if doing so risks an economic downturn.Read full story
Recent data for retail sales, housing and manufacturing suggest the economy is slowing after appearing to have recovered from a first-quarter slump, fueled mainly by a record trade deficit.
Last week’s data covers the period during which the government surveyed establishments for the nonfarm payrolls component of the June employment report. Applications increased moderately between the May and June survey periods.
The economy added 390,000 jobs in May. The claims report also showed that the number of people receiving benefits after an initial week of aid rose by 5,000 to 1.315 million during the week ending June 11.
Next week’s data on so-called continuing claims will shed more light on the June jobs report.