The labor market remains resilient, and the number of initial jobless claims in the US rose slightly to 197,000, lower than expected

The Zhitong Finance App notes that the increase in the number of people applying for unemployment benefits for the first time in the US last week was lower than expected, indicating that the labor market situation remains stable. According to data released on Thursday, the number of initial jobless claims increased by 9,000 to 197,000 in the week ending July 25. Economists had expected 200,000 people.

This increase partially offset the decline in the previous week, when the number of applicants was pushed to its lowest level since the end of 1969. Since automakers usually stop production in July for annual maintenance and equipment modifications, the number of applicants tends to fluctuate in July.

GM kept most of its assembly plants running this year, while Ford Motor Company cancelled its traditional plan to shut down production at its truck plant. This could interfere with the models the government uses to remove seasonal fluctuations from application data.

Economists say the labor market is still in a “slow recruitment, slow retreat” model. The Federal Reserve kept its benchmark overnight interest rate in the 3.50%-3.75% range on Wednesday. Three members of the Federal Reserve Policy Development Committee disagree, and they are “more likely” to raise interest rates by 25 basis points.

Claim reports show that the number of people who continue to receive unemployment benefits after their first one-week claim (which can be used as an alternative indicator of the recruitment situation) decreased by 7,000 in the week ending July 18, to 17.82 million after seasonal adjustments. The so-called number of continuous unemployment claims covered the period during which the government surveyed households on the July unemployment rate.

There is a risk that the unemployment rate will rise this month. According to a survey by the World Federation of Large Businesses on Tuesday, the share of consumers who think jobs are “plentiful” fell to their lowest level since February 2021 in July. The unemployment rate fell to 4.2% in June from 4.3% in May, mainly due to people dropping out of the workforce.