Jobless Claims Lower as Fed Watches Labor Market Strength
13 hr 11 min ago
Initial jobless claims fell last week, as Federal Reserve officials keep a sharp eye on the labor market for signs of weakness.
The number of people making their initial unemployment insurance claim for the week ending July 6 came in at 222,000, a drop of 17,000 from an upwardly-revised figure from the prior week, Labor Department data showed. Economists were expecting a larger result of 236,000 jobless claims.
The four-week moving average, which economists use as a less-volatile measure, was lower from the previous week by 5,250 claims.
Federal Reserve officials have emphasized the importance of labor market data in recent days, including Chair Jerome Powell. The head central banker told Congress this week that the Fed is now facing balanced risks from both unemployment and inflation. With inflation moving lower, a sharp rise in unemployment could prompt the central bank to move more quickly on interest rate cuts, which have been at decades-high levels.
“The latest data do show that we’ve had considerable cooling in the labor market,” Powell told Congress on Tuesday.
While claims were lower this week, Nancy Vanden Houten of Oxford Economics said that seasonal factors around Independence Day made the data “noisy” and difficult to identify trends. She pointed to continuing jobless claims, which rose for the first time since mid-April.
“Take a step back from seasonal noise, the claims data are consistent with a labor market characterized by a slower pace of hiring but still relatively few layoffs,” wrote Vanden Houten.
-Terry Lane
Inflation Slows Again in June, Bringing the Fed Closer to an Interest Rate Cut
15 hr 30 min ago
Consumer prices fell in June, potentially giving the Federal Reserve the confidence it is looking for to cut interest rates this year.
Inflation rose 3.0% over the year, down from a 3.3% annual increase in June, according to The Bureau of Labor Statistics’ Consumer Price Index. That was slightly lower than economists expected.
This is the latest evidence inflation has resumed its descent after a worrisome uptick in the first quarter. The data-dependent Fed has said they want to be confident inflation is falling toward their annual goal of 2% before cutting interest rates.