The number of initial claims for unemployment insurance increased by 4,000 during the week ended Saturday (Aug. 17), suggesting a cooling of the labor market and an upcoming cut in interest rates.
The total of 232,000 initial claims filed during the week was up from the previous week’s revised figure of 228,000, the Department of Labor (DOL) said in a Thursday (Aug. 22) press release. The previous week’s figure was revised up by 1,000.
The four-week moving average of 236,000 was 750 lower than the previous week’s revised average of 236,750, which was revised up by 250, according to the release.
The number of initial claims filed during the week — 232,000 — was higher than the 230,000 claims forecast by economists polled by Reuters, the media outlet reported Thursday.
While higher, the figure also suggests a steadying in the number of new applications being filed and suggests a cooling of the labor market that could contribute to a Federal Reserve decision to begin cutting interest rates in September, according to the report.
This trend joins a slowdown in overall U.S. business activity in adding to the evidence that both the economy and inflation are slowing, and reinforcing expectations of a September rate cut, the report said.
The Bureau of Labor Statistics downwardly revised its previously released job market data on Wednesday (Aug. 21), saying that the U.S. economy employed 818,000 fewer individuals (equating to 0.5% of all nonfarm employments) than what was initially reported.
The Federal Reserve bases its policies on BLS and other such data, meaning a hot job market portends higher interest rates, while a cooler employment landscape suggests rates may move lower, PYMNTS reported Wednesday.
The DOL also reported Thursday that the insured unemployment rate was 1.2% for the week ended Aug. 10, unchanged from the previous week’s rate, which was unrevised.
The insured unemployment number for that week was 1,863,000, which was 4,000 higher than the previous week’s revised figure of 1,859,000. The figure for the previous week was revised down by 5,000, per the release.
“This is the highest level for insured unemployment since November 27, 2021 when it was 1,878,000,” the DOL said in the release, referring to the number recorded on Aug. 10.
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