US weekly jobless claims increase slightly

Key Points
  • The Labor Department on Thursday said 215,000 Americans filed applications for unemployment benefits during the week of August 24, up from 211,000 the prior week.
  • Those initial claims fall perfectly in line with Wall Street estimates. 
Q2 GDP revised to 2.0% on second read, jobless claims rise to 215,000
Q2 GDP revised to 2.0% on second read, jobless claims rise to 215,000

The number of Americans filing applications for unemployment benefits rose moderately, pointing to sustained labor market strength despite slowing economic growth.

Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 215,000 for the week ended Aug. 24, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 more applications received than previously reported.

Last week's increase in claims was in line with economists' expectations. The Labor Department said only claims for the Virgin Islands were estimated last week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped 500 to 214,500 last week.

Layoffs have remained low despite a protracted trade war between the United States and China, which is crimping economic growth by undercutting business investment and manufacturing.

But the pace of job growth has been slowing since 2018. The government estimated last week that the economy created 501,000 fewer jobs in the 12 months through March 2019 than previously reported, the biggest downward revision in the level of employment in a decade.

According to economists at JPMorgan, this meant that job growth over that period averaged around 170,000 per month instead of 210,000. The government will publish the revised payrolls data next February.

Still, the pace of employment gains remains well above the roughly 100,000 jobs needed per month to keep up with growth in the working-age population. Sustained labor market strength is supporting the economy through strong consumer spending.

For now, that is helping to calm concerns of a recession, which were fanned by a sell-off on Wall Street and an inversion of the U.S. Treasury yield curve.

Thursday's claims report also showed the number of people receiving benefits after an initial week of aid increased 22,000 to 1.70 million for the week ended Aug. 17. The four-week moving average of the so-called continuing claims dipped 250 to 1.70 million.

The continuing claims data covered the week of the household survey from which August's unemployment rate will be calculated. The four-week average of continuing claims was little changed between the July and August survey periods, suggesting the jobless rate could hold steady at 3.7%.