US weekly jobless claims rise moderately

The number of Americans filing applications for unemployment benefits increased last week, but the trend in claims remained consistent with tightening labor market conditions.

Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 215,000 for the week ended July 27, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims increasing to 214,000 in the latest week. The Labor Department said no claims were estimated last week.

There are still no signs of a pickup in layoffs as a result of an ongoing trade war between the U.S. and China. The Federal Reserve on Wednesday cut interest rates for the first time since 2008, to insure against downside risks to the economy from the trade tensions and slowing global growth.

Fed Chairman Jerome Powell said the preemptive monetary policy easing was “not the beginning of a long series of rate cuts.” Powell gave an upbeat assessment of the labor market, saying “people who live and work in low- and middle-income communities tell us that many who have struggled to find work are now getting opportunities to add new and better chapters to their lives.”

Labor market strength is expected to underpin the slowing economy as rising wages support consumer spending.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,750 to 211,500 last week.

The claims data has no bearing on July’s employment report, which is scheduled to be released on Friday. According to a Reuters survey of economists, nonfarm payrolls likely increased by 164,000 jobs in July after surging by 224,000 in June. Job gains averaged 172,000 per month in the first half of this year, below the monthly average of 223,000 in 2018.

The pace of job gains, however, remains above the roughly 100,000 per month needed to keep up with growth in the working-age population. The unemployment rate is expected to have held steady at 3.7% in July.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 22,000 to 1.70 million for the week ended July 20. The four-week moving average of the so-called continuing claims edged up 750 to 1.70 million.