According to the Labor Department, worker filings for unemployment benefits have dropped in the past week, suggesting that the labor market remains stable. In the week ending July 8, initial claims, which serve as a proxy for layoffs, decreased by 12,000 to a seasonally adjusted 237,000. Earlier in the year, weekly claims had seen a slight increase due to job cuts in the tech, finance, and real-estate sectors. However, since March, filings have remained steady at around 250,000.
The four-week average of weekly claims, which smooths out fluctuations, also experienced a decline and now stands at 246,750.
Despite Federal Reserve interest-rate hikes aimed at tempering economic growth and reducing high inflation rates, initial claims remain at relatively low levels. This showcases the resilience of the labor market. Prior to the pandemic in 2019, when the labor market was also strong, claims had averaged 220,000 per week.
In June, U.S. employers added 209,000 workers. Although this marked the smallest gain in monthly job growth in two and a half years, the unemployment rate still dropped to 3.6%. Additionally, average hourly wages saw a year-over-year increase of 4.4% in June.
Continuing claims, which reflect the number of individuals seeking additional weeks of unemployment benefits, rose by 11,000 to reach 1.729 million in the week ending July 1. It is important to note that continuing claims data is reported with a one-week lag.