Jobless claims whole 232,000, lowest in two months

Initial jobless claims fell to their lowest level since late June last week, a sign the job market is resilient amid a slowing economy.

Claims totaled 232,000 in the week ended August 27, seasonally adjusted, down 5,000 from the previous period and the lowest since June 25, the Labor Department reported Thursday.

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Economists polled by Dow Jones had searched for 245,000.

The ongoing claims climbed to 1.44 million, up 26,000 from the previous level in data a week behind the headline figure.

The numbers come a day ahead of the closely-watched nonfarm payrolls report for August, although it falls outside of the survey week that the Bureau of Labor Statistics uses to compile that census. Wall Street expects this report to show job gains totaling 318,000 in August, a notoriously volatile month statistically.

Amid fears that the US is headed for recession, the labor market has provided a bulwark indicating labor demand is strong and consumer spending has held up despite rising inflation.

Earlier this week, the BLS reported that job vacancies have risen to over 11.2 million, exceeding the available labor pool by nearly 2 to 1. Data on Wednesday from payroll firm ADP showed private companies added just 132,000 jobs in August, but most economists have so far kept their forecast of solid growth for the month.

Federal Reserve officials have sought to close the jobs gap and curb inflation through a series of aggressive rate hikes. Despite these moves, inflation remains near its highest level in more than 40 years.

In recent days, several Fed officials have indicated that interest rate moves are likely to continue. In a speech Wednesday, Cleveland Fed President Loretta Mester said she expects the fed funds rate, a benchmark used by banks for overnight lending but also tied to many consumer debt instruments, to rise above 4% by early 2023 becomes. The interest rate is currently targeted in a range of 2.25% to 2.5%.

Separate data released by the BLS on Thursday showed that the fall in productivity in the second quarter was not as sharp as initially reported. The revised productivity level showed a fall of 4.1%, an upward revision of half a percentage point from the original figure. Economists had expected a value of minus 4.3%.

Unit labor costs, or the amount of compensation compared to performance, rose 10.2% in the quarter, 0.4 percentage points less than expected. However, the four-quarter increase of 9.3% is the highest level since the first quarter of 1982.

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