The number of new applications for unemployment benefits filed by Americans decreased last week, suggesting a foundation of strength in the labour market.
The Labor Department said on Thursday, May 16, that initial claims for state unemployment benefits decreased by 10,000 to a seasonally adjusted 222,000 for the week ending May 11. According to Reuters polled economists, 220,000 claims were expected in the most recent week.
A chunk of the previous week’s spike that had driven claims to their greatest point in over eight months was undone by the decrease. The spike in applications in New York connected to school spring holidays was primarily responsible for the increase.
The labour market is still robust, but it is gradually readjusting as a result of the Federal Reserve raising interest rates by 525 basis points since March 2022 to reduce demand across the board.
The likelihood of a rate cut in September has increased due to improving labour market conditions and the continuation of the declining trend in inflation. The US Federal Reserve maintained its benchmark overnight interest rate at 5.25 to 5.5% last month, the same range it has been in since July.
According to the claims report, during the week ending May 4, the number of people getting benefits after an initial week of aid—a proxy for hiring—increased by 13,000 to a seasonally adjusted 1.794 million.
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