Weekly jobless claims fell to their lowest level since late June as employers appear unwilling to part with workers in a tight labor market.
According to a report from the U.S. Labor Department, 232,000 Americans filed for unemployment benefits for the first time in the week ended Aug. 27. It is 5,000 lower the previous week's level, which was revised downward by 6,000 applications. This is the lowest level since the end of the week of June 25, when there were 231,000 initial claims.
The decline in initial filings also exceeded the expectations of economists who had predicted an increase in claims. This also follows several weeks of unexpected declines.
The Labor Department reported that continuing jobless claims for the week ended Aug. 20 rose to the highest level since early April from 26,000 to 1.44 million.
However, weekly jobless claims data may be revised.
Despite fears of a recession and the Federal Reserve's attempts to slow the labor market, employers seem in no hurry to hand out loss notices. Earlier this week, the Bureau of Labor Statistics reported that job openings in July unexpectedly rose to 11,2 million and the number of the layoffs was 1,4 million, which is 2,000 fewer than in June.
While there have been a few layoff headlines lately, the cuts seem to be mostly in certain types of businesses or industries.
According to senior labor economist at analyst firm Lightcast Ron Hetrick, most of the layoff announcements have come from technology and technology-related companies that have increased their workforce to cope with the sudden demand for their services caused by the pandemic.
Because of health and safety measures as well as related mass gatherings restrictions, consumer dollars previously spent on services shifted to goods. The underlying technology that enables these purchases must grow, he said.
U.S. employers announced 20,485 layoffs in August. It is 21% lower than the previous month but is 30% higher in comparison with the same month a year ago, when the country was still in the midst of a post-pandemic job recovery, according to a separate report by Outplacement. Representatives Challenger, Gray & Christmas said that the number of job cuts announced in August is the lowest in the year beginning since 1993.
If the dynamics of indicators will continue its positive trend, the market will be undoubtedly strongly supported.