WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell last week, signaling an underlying strength in the labor market that should continue to support the economy.
Initial claims for unemployment benefits fell by 8,000 to a seasonally adjusted 215,000 for the week ending May 18, the Labor Department said Thursday. Economists polled by Reuters had forecast 220,000 claims last week.
The labor market is steadily rebalancing in the wake of 525 basis points worth of rate hikes by the Federal Reserve since March 2022, dampening demand in the broader economy.
The minutes of the U.S. central bank’s April 30-May 1 policy meeting released Wednesday show that officials believe “the net supply and demand in the labor market has continued to become more balanced, albeit at a slower pace.” But they also noted that conditions had “remained generally tight.”
The Fed has kept its benchmark interest rate within the current range of 5.25%-5.50% since July. The financial markets expect the first interest rate cut to take place in September.
The claims data covered the period when the government surveyed employers on the nonfarm payroll component of May’s employment report. The claims changed little between the April and May survey weeks. Data next week on the number of people receiving benefits after an initial week of aid, a benchmark for hiring, could provide further clarity on the state of the labor market
The number of so-called continuing claims rose by 8,000 to a seasonally adjusted 1.794 million in the week ending May 11, the claims report showed.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
