New claims for unemployment benefits in the US fell to their lowest level since June at the end of August, confirming the resilience of the US labor market to the shocks that the inflation rally continues to cause.
Specifically, initial jobless claims fell by 5,000 for the week ended Aug. 27, sliding to a nine-week low of 232,000. The previous week’s reading was revised lower to 237,000 from 242,000 initially reported.
It is noted that the average estimate of analysts in a Wall Street Journal poll placed applications at 245,000.
Initial claims had fallen to a low of 166,000 at the end of March, the second-lowest in the survey’s history, before starting to rise over the summer.
The continued resilience of the labor market, however, is fueling fears of a more aggressive stance from the Federal Reserve as part of its effort to rein in inflation. The US central bank has already raised interest rates by a total of 225 basis points since March.
Investors are also waiting for the data that the US government will announce tomorrow for an overall picture of the labor market. Analysts expect government data to show an increase of 300,000 jobs in August, after July’s jump of 528,000 positions, according to a Reuters poll.
Source: Capital
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