US jobless claims fall as labor market remains strong

US jobless claims fall as labor market remains strong

US jobless claims fall as labor market remains strong

Despite signs of underlying labor market strength, also corroborated by record high job openings, August's slowdown in job growth, together with sluggish factory and services sector activity could encourage the Federal Reserve to keep interest rates unchanged at its September 20-21 policy meeting.

More broadly, jobless claims touched a four-decade low in April and have hovered modestly above the level for most of the spring and summer.

With most eyes on a lack of new quantitative easing from the European Central Bank, this weekly jobless claims report is largely being ignored.

This release is the 79 consecutive figure that stands below the value of 300,000, a direct outcome of the healthy condition of the labor market, this is the longest streak since 1970, when the USA had a considerably smaller labor market.

Prices for US government debt fell, as did USA stocks.

Despite labor market resilience, data so far for August suggest some cooling in economic activity.

While there was nothing unusual in the data, claims in five states and Puerto Rico were estimated last week, according to the Labor Department. Analysts had expected continuing claims to inch up to 2.153 million.

The Labor Department says the number of applications for jobless aid slid by 4,000 last week to a seasonally adjusted 259,000, lowest since mid-July.

THE TAKEAWAY: Unemployment claims are a proxy for layoffs. A report on Wednesday showed job openings hit a record high in July, though hiring continued to lag, suggesting a possible skills mismatch.

Last Friday, the Labor Department released a separate report showing weaker than expected job growth in the month of August.

Individuals continuing to receive unemployment benefits as of the week ending August 27 fell by 7,000 to 2.144 million from the prior week's revised level of 2.151 million (from 2.159 million).

The four-week moving average also fell to 261,250. Get twice-daily updates on what the St. Louis business community is talking about.

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