US jobless claims edge lower, reflecting tight labour market

APPLICATIONS for US unemployment insurance were little changed last week, suggesting the labour market remains exceptionally tight.

Initial unemployment claims decreased by 3,000 to 229,000 in the week ended Jun 11, Labor Department data showed on Thursday (Jun 16). The median estimate in a Bloomberg survey of economists called for 217,000.

Continuing claims for state benefits were also little changed at 1.31 million in the week ended Jun 4.

The report is consistent with a robust labour market in which layoffs remain extremely low. The unemployment rate is hovering near a 5-decade low and there are roughly 2 job openings for every unemployed worker. Even so, recession fears are growing as the Federal Reserve (Fed) aggressively hikes interest rates to tame inflation, and a growing number of companies have announced job cuts in recent days.

The Fed on Wednesday raised interest rates the most since 1994, and has signalled aggressive policy tightening through the rest of the year to curb demand and therefore price pressures. Policy makers reckon that'll take the unemployment rate up to 4.1 per cent at the end of 2024, but Fed Chair Jerome Powell emphasised that rate would still be historically low.

The jobless claims 4-week moving average, a measure which smooths out some of the volatility in the series, rose slightly to 218,500. BLOOMBERG