In a positive development for the U.S. economy, initial unemployment insurance filings decreased more than anticipated last week. While this is encouraging news, we advise caution as similar patterns have preceded subsequent increases in the past (see graph below). Nevertheless, this decline provides some reassurance to markets concerned about further signs of deterioration in the U.S. labor market and the broader economy.
According to new data from the Department of Labor, there were 233,000 initial jobless claims filed in the week ending August 3, down from 250,000 the previous week and below the 240,000 economists had predicted. The week ending July 27 saw jobless claims reach their highest level since August 2023.
However, the number of continuing unemployment benefit applications reached its highest level since November 2021, with 1.875 million claims filed in the week ending July 27, an increase of 6,000 from the previous week.
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