Initial filings for unemployment insurance fell to their lowest level since late June last week, a sign that the labor market is resilient amid a slowing economy.
Claims totaled a seasonally adjusted 232,000 for the week ended Aug. 27, a decline of 5,000 from the previous period and the lowest since June 25, the Labor Department reported Thursday.
Economists surveyed by Dow Jones had been looking for 245,000.
Continuing claims increased to 1.44 million, up 26,000 from the previous level in data that runs a week behind the headline number.
The numbers come a day ahead of the closely watched nonfarm payrolls report for August, though it is outside the survey week the Bureau of Labor Statistics uses to compile that count. Wall Street is expecting that report to show that job gains in August, a notoriously volatile month statistically, will total 318,000.
Amid worries that the US is teetering on recession, the jobs market has provided a bulwark indicating that hiring demand is strong and consumer spending has held up despite soaring inflation.
Earlier this week, the BLS reported that job openings rose past 11.2 million and outnumber the available worker pool by just shy of 2 to 1. Data on Wednesday from payroll processing firm ADP indicated that private companies added just 132,000 jobs in August, but most economists thus far have held with their forecast for solid growth for the month.
Federal Reserve officials have been trying to bridge the jobs gap and slow down inflation through a series of aggressive interest rate increases. Despite those moves, inflation remains near its highest level in more than 40 years.
Over the past several days, multiple Fed officials have indicated the rate moves are likely to continue. In a speech Wednesday, Cleveland Fed President Loretta Mester said she expects the fed funds rate, a benchmark used by banks in overnight lending but also tied to many consumer debt instruments, to rise above 4% by early 2023. The rate is currently targeted in a range of 2.25%-2.5%.
Separate data the BLS released Thursday showed that the productivity decline in the second quarter wasn’t as sharp as initially reported. The revised productivity level showed a drop of 4.1%, an upward revision of half a percentage point from the initial reading. Economists had been expecting a reading of minus-4.3%.
Unit labor costs, or the amount of compensation compared to output, rose 10.2% for the quarter, 0.4 percentage point less than the estimate. However, the four-quarter increase of 9.3% is the highest level since the first quarter of 1982.
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