The number of Americans filing initial claims for unemployment benefits rose slightly to 230,000 last week, in line with economists' expectations as the U.S. job market continues to cool.
According to Labor Department data, unemployment claims for the week ending Sept. 7 increased by 2,000 from 228,000 the previous week.
Economists polled by Reuters had expected 230,000.
The latest jobless claims numbers are a positive sign, suggesting the U.S. labor market remains strong despite the hiring slump.
Last week's data included the Labor Day holiday.
Jobless claims tend to fluctuate around holidays, but have remained little changed since falling from an 11-month high of 250,000 in late July.
According to government data last week Nonfarm Payrolls The unemployment rate rose less than expected in August, but the unemployment rate fell to 4.2% from 4.3% in July.
The Fed's aggressive rate hikes in 2022 and 2023 following the pandemic have suppressed demand, stagnating hiring and contributing to a slowdown in the labor market.
The central bank kept the benchmark overnight rate at the current range of 5.25%-5.50% for one year, before raising it by 525 basis points in 2022 and 2023.
Economists expect the U.S. to face a recession after a series of rate hikes, but easing inflation is raising hopes the Fed can achieve a soft landing.
Weakening hiring and easing inflation over the past few weeks have fueled investor expectations that the Fed will cut interest rates by 50 basis points when it meets next week.
But a better-than-expected core inflation figure released on Wednesday morning appeared to dash hopes that traders were hoping for a 50 basis point (equivalent to half a percentage point) rate cut rather than the usual 25 basis point cut.
Following the core inflation data, traders see an 87% chance that the Fed will cut rates by 25 basis points when it meets on Sept. 17-18, according to CME's FedWatch tool, which would be the first cut since March 2020.
Federal Reserve Chairman Jerome Powell signaled that an interest rate cut is possible in September if inflation continues to ease and the job market continues to cool.
“The time has come to adjust policy,” Mr. Powell said in late August.
The number of people receiving benefits in the first week of aid, a measure of employment, rose by 5,000 in the week ended Aug. 31 to a seasonally adjusted 1.85 million, according to jobless claims reports.
Those continuing claims have eased since surging to levels not seen since 2021 in July.
The four-week moving average, which helps offset unusual spikes and drops, was 230,750, up 500 from the previous week's revised average.
Several major US companies have announced job cuts this year, including media outlets such as CNN and Time, technology companies such as Apple, and automakers such as General Motors and Stellantis.
With post wire
