The number of Americans filing new claims for jobless benefits fell sharply last week as the labor market remained resilient despite mounting problems from the Federal Reserve's continued interest rate hikes and slowing demand.
Initial claims for state jobless benefits fell 16,000 to 193,000 for the week ended Sept. 24, the Labor Department said on Thursday. Data for the previous week has been revised to show 4,000 fewer applications filed than previously reported. Economists polled by Reuters had even forecast 215,000 applications for the latest week.
Despite reports of some companies laying off workers, jobless claims remain in the 168,000-252,000 range for the year. Economists say most employers have had difficulty hiring workers in the past year due to the COVID-19 outbreak.
U.S. central bank last week it raised its key interest rate by 75 basis points, the third consecutive increase of that size, and signals bigger increases to come this year. Since March, the Fed has raised its policy rate from near zero to the current range of 3.00% to 3.25%.
There were 11.2 million job openings at the end of July, with two jobs for every unemployed person.
The claims report showed the number of people receiving benefits after the initial week of aid fell by 29,000 to 1.347 million in the week ending September 17.
A strong labor market helps sustain the economy. Although a separate report from the Commerce Department on Thursday confirmed that the economy contracted in the first half of the year, the economy does not appear to be in recession, with the income side of the growth ledger growing moderately.
Gross domestic product fell at an annual rate of 0.6% last quarter. The economy contracted at a rate of 1.6% in the first quarter.
The government also revised GDP data from the fourth quarter of 2016 to the fourth quarter of 2021, which showed the economic recovery from the COVID-19 outbreak was much stronger than initially thought.
