US Weekly Jobless Claims Fall to 233K, Easing Labor Market Concerns
Initial jobless claims in the U.S. decreased to 233,000 for the week ending August 3, a decline of 17,000 from the previous week’s revised level and below the Dow Jones estimate of 240,000. This drop marks the largest decline in about 11 months, suggesting that concerns over a potential collapse in the labor market may be exaggerated. Despite this positive sign, continuing claims rose by 6,000 to 1.875 million, the highest since November 2021. The four-week moving average of initial claims also increased to 240,750, the highest in nearly a year.
The Labor Department’s report comes amid other indicators of a weakening labor market. The July nonfarm payrolls report showed an increase of 114,000 jobs, which is lower than expected, and a rise in the unemployment rate to 4.3%. This increase triggered the Sahm Rule, a recession indicator that measures changes in the jobless rate. Meanwhile, the Federal Reserve has kept its benchmark interest rate in the 5.25-5.50% range but has signaled a potential reduction in borrowing costs at its next policy meeting in September, with interest rate futures suggesting a roughly 70% probability of a rate cut.
