Applications for US unemployment benefits fell for a sixth straight week, underscoring the resilience of the labor market.
Initial claims decreased by 4,000 to 217,000 in the week ended July 19, still the lowest since mid-April. That marked the longest stretch of declines since 2022, and the figure fell short of the median forecast in a Bloomberg survey of economists.
Continuing claims, a proxy for the number of people receiving benefits, were little changed at 1.96 million in the previous week, according to Labor Department data released Thursday.
Weekly claims remain near the subdued levels seen prior to the pandemic, indicating employers are largely retaining staff. However, recurring claims for the last couple of months have hovered around the highest levels since 2021. This suggests unemployed workers continue to have difficulty in securing a new position.
The elevated number of continuing claims may put pressure on the unemployment rate, which is expected to tick up to 4.2% in next week’s July jobs report. Economists also predict a slowdown in hiring, with one forecaster projecting zero payrolls added in the month.
The characterization of the labor market will also be a key feature of the Federal Reserve’s policy meeting next week. Governor Christopher Waller broke from most of his colleagues last week in describing the job market as “on the edge,” while other Fed officials have recently said it’s “solid” and “broadly healthy.”
The four-week moving average of new applications, a metric that helps smooth out volatility, fell to 224,500, also the lowest in three months.
Before adjusting for seasonal factors, initial claims plummeted by more than 45,000, led by big states like New York and California, as well as in Michigan, Missouri and Ohio — which are home to car factories. Claims data tend to be volatile, especially in summer when schools are on vacation and auto plants temporarily lay off workers during retooling for the new model year.
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