The number of Americans filing new claims for unemployment benefits rose slightly last week, suggesting the labor market remained firm even as laid-off workers took longer to find new jobs.
Initial claims for state unemployment benefits rose by 1,000 to a seasonally adjusted 218,000 for the week ended July 26, the Labor Department said on Thursday. Economists polled by Reuters had expected 224,000 claims for the week.
The labor market has been slowing, with economists saying uncertainty about the level of tariffs President Donald Trump will ultimately impose has made businesses wary of hiring. But the supply of labor has also been squeezed by the White House’s crackdown on immigration.
The Federal Reserve on Wednesday kept its benchmark interest rate at 4.25%-4.50%, defying Trump’s pressure to lower borrowing costs. Fed Chairman Jerome Powell told reporters that the labor market was in balance, but added that the balance was partly due to a decline in demand and supply, “we do see downside risks in the labor market,” he said.
The central bank has cut interest rates three times in 2024, with the last cut in December. Most economists expect policy easing to continue in September.
Employers’ reluctance to add workers means job opportunities are increasingly limited for those laid off. Government data on Tuesday showed there were 1.06 job openings for every unemployed person in June, compared with 1.33 in January.
The claims data will not affect the July jobs report due on Friday because it falls outside the survey period. A Reuters poll of economists had expected the nonfarm payrolls sector to have added 110,000 jobs last month after rising 147,000 in June. The unemployment rate is forecast to rise to 4.2% from 4.1% in June.
