Media365
The number of Americans filing for unemployment benefits for the first time dropped sharply last week, underscoring the resilience of the US labour market and strengthening expectations that the Federal Reserve will keep its focus on inflation at next week’s policy meeting.
According to data released by the US Department of Labor on Thursday, initial jobless claims fell by 22,000 to a seasonally adjusted 187,000 for the week ended July 18. The reading came in well below Reuters’ consensus estimate of 212,000, indicating that layoffs remain subdued despite elevated interest rates.
The latest claims data also covered the survey period for the closely watched July non-farm payrolls report, offering another sign that the labour market continues to remain stable.
Meanwhile, continuing claims, which track the number of people receiving unemployment benefits after their initial claim, declined to 1.796 million in the week ended July 11. The figure is often viewed as a gauge of hiring conditions and suggests employers continue to absorb workers despite slower job creation.
The report follows June’s employment data, which showed the US unemployment rate unexpectedly eased to 4.2 per cent, although the decline was largely driven by a fall in labour force participation rather than a surge in hiring.
The US labour market has remained remarkably balanced over the past year, with restrained hiring, limited layoffs, and a relatively tight supply of workers keeping unemployment near historically low levels.
The data is likely to reinforce the Federal Reserve’s cautious stance as policymakers prepare for their monetary policy meeting next week. While markets widely expect the central bank to leave benchmark interest rates unchanged, persistent labour market strength and inflation above the Fed’s 2% target continue to keep the possibility of another rate hike later this year on the table.
Financial markets are currently pricing in at least one 25-basis-point interest rate increase before the end of 2026.
