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Jobless claims edge lower as Fed looks to cool labor market

A “We’re Hiring” sign is posted at a Target store on August 05, 2022 in San Rafael, California.
Justin Sullivan | Getty Images

Initial filings for unemployment benefits declined slightly last week though they were consistent with a drift higher in layoffs that began in the spring, the Labor Department reported Thursday.

Jobless claims totaled 250,000 for the week ended Aug. 13, down 2,000 from the previous week and below the 260,000 Dow Jones estimate.

The four-week moving average for claims, which helps smooth out weekly volatility, also fell by 2,750 to 246,750.

Earlier this year, claims had hit their lowest level in more than 50 years, but began moving higher in April after bottoming at 166,000. The four-week moving average has risen during that time by nearly 80,000.

Continuing claims, which run a week behind the headline number, totaled 1.437 million, an increase of 7,000.

Policymakers are watching the jobs market closely at a time when inflation is running near 40-year highs. Federal Reserve officials have instituted a series of interest rate increases aimed in part at cooling a labor market in which there are nearly two jobs open for every available worker.

At their July meeting, Fed officials noted “tentative signs of a softening outlook for the labor market” that included a rise in weekly claims. Policymakers said they were determined to continue to raise interest rates until inflation under control even if meant more a slowdown in hiring.

In other economic news Thursday, the Philadelphia Fed reported that its monthly manufacturing survey for August rose to a reading of 6.2, representing the percentage difference between companies expecting expansion vs. contraction.

That was above the estimate for a minus-5 reading and helped quell fears that manufacturing might be headed for a major slowdown. A similar survey on Monday from the New York Fed fell a stunning 40 points as respondents indicated that business conditions were deteriorating.

This is breaking news. Please check back here for updates.

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