Initial claims for unemployment insurance benefits decreased during the week ending on Saturday (Aug. 19).
The seasonally adjusted figure for that week’s initial claims stood at 230,000, marking a decline of 10,000 from the previous week’s revised level, the U.S. Department of Labor (DOL) said in a Thursday (Aug. 24) press release.
The DOL revised the previous week’s level, increasing it by 1,000 to 240,000, according to the release.
The latest figures show that labor market conditions remained tight despite aggressive interest rate hikes by the Federal Reserve, Reuters reported Thursday. Economists polled by the media outlet before the release of the DOL data had expected the number of new claims to be higher, predicting it to be 240,000.
The report attributed the lower-than-expected number to employers “hoarding” workers after having difficulty hiring help during the pandemic. Reuters added that the combination of a strong labor market and a declining rate of inflation has boosted hopes that the economy can avoid a recession.
It was reported Tuesday (Aug. 22) that average job growth remains strong and that even an expected downward revision in previously released payroll growth numbers wouldn’t lead economists to change their minds about the strength of the U.S. job market.
Despite the latest week’s figure, the overall trend shows an increase in initial claims. The four-week moving average, which smooths out weekly fluctuations, was 236,750 initial claims, reflecting an increase of 2,250 from the previous week’s revised average, the DOL press release said.
The report further revealed a decrease in insured unemployment during the week ending on Aug. 12. The seasonally adjusted insured unemployment rate dropped by 0.1 percentage point to 1.1%, with the number of insured unemployed individuals decreasing by 9,000 to 1,702,000, per the release.
Notable changes in specific states were also highlighted in the data. California experienced the largest decrease in initial claims, with a decline of 3,959, according to the press release. Texas and Pennsylvania also saw significant decreases of 1,641 and 1,155, respectively. On the other hand, Virginia, Iowa and Illinois reported the largest increases in initial claims.
In a comment supplied to the DOL, Pennsylvania attributed its decrease in initial claims to “fewer layoffs in the transportation and warehousing, administrative and support and waste management and remediation services, professional, scientific and technical services, and manufacturing industries.”