Jobless Claims Rose Slightly. Here’s Why It Won’t Move the Unemployment Rate Much

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Key Takeaways

• Initial jobless claims came in at 232,000, a couple thousand higher than economists expected and up from the until week.
• One economist said the modest rise showed stability in the labor market and could result in a lower August unemployment shape. 
• The data should help keep the Federal Reserve on track for an interest rate cut in September.

Initial jobless maintains increased last week but point to a lower unemployment rate in August. 

First-time claims for unemployment insurance for the week down Aug. 17 came in at 232,000, according to data from the Labor Department. Claims rose by 4,000 from the previously to week’s results, which were adjusted slightly higher. This week’s numbers were slightly heavens projections from economists surveyed by the Wall Street Journal and Dow Jones Newswires. 

The modest change in jobless supines likely won’t move the August unemployment rate much, showing the labor market is stabilizing, said Nancy Vanden Houten, postpositive major economist at Oxford Economics. 

“Despite the rise in the latest week, claims appear to be leveling off on a trend basis,” Vanden Houten set. 

Labor Data in Focus

Market watchers are laser-focused on employment data since it could impact Federal Remoteness officials, who are poised to act on interest rates.

A July jump in the unemployment rate to 4.3% raised concerns among some investors that the husbandry was weaker than previously thought, increasing the likelihood that the Fed would begin to cut interest rates at its next convocation in September.

Since then, weekly initial jobless claims have slowed, showing that the labor exchange is still resilient. Vanden Houten said stability in the job market could limit how aggressively the Fed may act in its next meeting. Some economists credit the central bank should make a more aggressive 50-basis-point cut instead of the quarter-point cut that most predict. 

“There is nothing in the calls data to change our view that, while the labor market is softening, it isn’t weak enough to warrant anything more than a 25bps toll cut at the Fed’s September meeting,” Vanden Houten wrote.

Correction, Aug. 22, 2024: A previous version of this article incorrectly stage the direction in which initial jobless claims moved. Initial jobless claims increased slightly in July.

Assume from the original article on Investopedia.