WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell last week, pointing to underlying strength in the labor market that should continue to support the economy.
Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 215,000 for the week ended May 18, the Labor Department said on Thursday. Economists polled by Reuters had forecast 220,000 claims in the latest week.
The labor market is steadily rebalancing in the wake of 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to slow demand in the overall economy.
Minutes of the U.S. central bank’s April 30-May 1 policy meeting published on Wednesday showed officials assessed that “demand and supply in the labor market, on net, were continuing to come into better balance, though at a slower rate.” But they also noted that conditions had “generally remained tight.”
The Fed has kept its benchmark overnight interest rate in the current 5.25%-5.50% range since July. Financial markets expect the first rate cut will come in September.
The claims data covered the period during which the government surveyed employers the nonfarm payrolls component of May’s employment report. Claims were little changed between the April and May survey weeks. Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, could offer more clarity on the state of the labor market
The so-called continuing claims rose 8,000 to a seasonally adjusted 1.794 million during the week ending May 11, the claims report showed.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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