(Reuters) – The number of Americans filing new applications for unemployment benefits rose in the latest week, but the level still suggested a gradual cooling of the labor market remains intact.
Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 232,000 for the week ended Aug. 17, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.
The latest data should continue to allay fears that the labor market is rapidly deteriorating, first raised after a much sharper than expected slowdown in job gains in July, which also saw the unemployment rate rise to a post-pandemic high of 4.3%.
Federal Reserve officials have said they are keenly watching the labor market, aware that waiting too long to cut interest rates could cause serious harm.
Layoffs remain historically low, however, with much of the slowdown in the labor market coming from firms scaling back hiring, trailing an immigration-induced surge in labor supply.
The Federal Reserve’s 525 basis points worth of rate hikes in 2022 and 2023 are curbing demand.
The U.S. central bank has kept its benchmark overnight interest rate in the current 5.25%-5.50% range for more than a year but is now widely expected to begin a rate-cutting cycle at its next policy meeting on Sept. 17-18.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose 4,000 to a seasonally adjusted 1.863 million during the week ending Aug. 10, the claims report showed.
(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)
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