WASHINGTON, July 9 (Reuters) – The number of Americans filing claims for unemployment benefits fell last week, suggesting the labor market remained stable despite a slowdown in job growth in June.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 215,000 for the week ended July 4, the Labor Department said on Thursday. Economists polled by Reuters had forecast 218,000 claims for the latest week.
Claims have dropped after rising at the end of May and the beginning of June, with economists mostly dismissing the increase as noise related to difficulties adjusting the data at the end of the school year. Some states allow non-teaching staff to apply for unemployment benefits during the long school holiday, which can throw off the model used by the government to strip out seasonal fluctuations from the data.
Though job growth slowed sharply in June and the nonfarm payrolls count for April and May was revised lower, economists said there had been no material shift in the labor market, which they viewed as stuck in a “slow hire, slow fire” state.
Minutes of the Federal Reserve’s June 16-17 meeting published on Wednesday showed policymakers’ concerns about inflation mounted last month and they “generally expected labor market conditions to remain stable in the near term, with the unemployment rate staying close to current levels.”
The minutes also noted that “several participants cited, however, the possibility that uncertainty related to geopolitical developments or the broader economic outlook could lead firms to reduce hiring or begin implementing layoffs.”
The Fed left its benchmark interest rate unchanged in the 3.50%-3.75% range at the June meeting, though new projections revealed a growing sentiment around a likely rate hike this year. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 8,000 to a seasonally adjusted 1.814 million during the week ended June 27, the claims report showed.
The elevation in the so-called continuing claims reflects seasonal adjustment issues related to the school holidays.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
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