Unemployment claims fall to 232,000, lowest level since June

Initial filings for unemployment insurance dropped to its lowest level since late June last week, a possible indication that the labor market is holding firm in a slow growing economy.

Labor Department reported on Thursday that claims totaled a 232,000 for the week ended August 27, which represents a reduction of 5,000 from the previous period and the lowest since June 25. The number of claims has been seasonally adjusted.

The Labor Department also said in their report that the continuing jobless claims for the week ending August 20 increase by 26,000 to 1.44 million, which is the highest number since early April.

Earlier on in the week, the Bureau of Labor Statistics reported that job openings increased in July to 11.2 million and there were 1.4 million redundancies, which is a decrease 2,000 from June.

Redundancies have still been occurring; however they have been restricted to certain types of industries. The lion share of redundancies have come from technology and tech related companies companies who ramped up their workforces to handle the extra demand for their services, which came as a result of Covid restrictions Ron Hetrick, who is senior labor economist for labor market analytics firm Lightcast, confirmed.

Several large cap companies such as Alphabet’s Google, Walmart, Apple, Meta and Microsoft, also announced freezes on new recruitment and/or redundancies in the last few weeks.

Cleveland Federal President Loretta Mester announced on Wednesday that she believes benchmark rate will creep above 4% this year and stay elevated for some time until prices start to edge closer to the central bank’s 2% target.

“My current view is that it will be necessary to move the fed funds rate up to somewhat above 4% by early next year and hold it there,” Mester, a voting member of the Federal Open Market Committee, said. “I do not anticipate the Fed cutting the fed funds rate target next year.”