US jobless claims fall slightly, hold near 8-month high

APPLICATIONS for US unemployment insurance fell for the first time in 4 weeks but held near the highest level since November, indicating continued moderation in the labour market.

Initial unemployment claims decreased by 5,000 to 256,000 in the week ended Jul 23, Labor Department data showed on Thursday (Jul 28). The median estimate in a Bloomberg survey of economists called for 250,000 applications.

Continuing claims for state benefits fell to 1.36 million in the week ended Jul 16.

The monthly jobs report from the government, scheduled for next week, is forecast to show another solid month of hiring in July, with the unemployment rate holding near a 50-year low.

Jobless claims have generally been rising in recent months and are hovering near the highest since November, coinciding with an increase in job cuts and hiring freezes at high-profile companies in sectors including technology and housing.

Further weakening in what remains a tight labour market is probably on the horizon after the Federal Reserve pressed on with one of the largest interest-rate hiking cycles in a generation on Wednesday to help cool the economy and tame decades-high inflation.

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US weekly jobless claims hit fresh 8-month high

Still, chair Jerome Powell said the labour market remains “extremely tight”, referencing a near-record number of job openings and historically low unemployment.

In recent weeks, tech companies including Spotify and Alphabet’s Google have said they will slow hiring in a time of global economic uncertainty. Firms in other industries such as crypto, housing and cars have also said they are letting workers go. 

The jobless claims 4-week moving average, a measure which smooths out some of the volatility in the series, ticked up to 249,250. It has risen in 15 of the last 16 weeks. BLOOMBERG