Worker Filings for Unemployment Benefits Decline

By Christian Robles

Worker filings for unemployment benefits in the United States dropped last week, indicating a robust labor market that is nearly on par with pre-pandemic levels. According to the Labor Department, initial claims, which serve as a proxy for layoffs, fell by 7,000 in the week ending July 22 to a seasonally adjusted 221,000. This is similar to the average number of claims filed in 2019, when the labor market was also performing well.

The four-week moving average of weekly claims, which helps smooth out volatility, decreased to 233,750.

After experiencing an uptick earlier this year due to job cuts in various industries including technology, finance, and real estate, initial claims have been trending downward in recent weeks.

In June, U.S. employers added 209,000 jobs, causing the unemployment rate to drop to 3.6%. However, compared to previous years, the pace of job and wage growth has slowed in 2023. In light of this, the Federal Reserve raised its benchmark interest rates on Wednesday—marking a 22-year high—as part of its efforts to cool down the economy and curb inflation.

Meanwhile, continuing jobless claims, which indicate the number of individuals seeking an additional week of unemployment benefits, fell to a seasonally adjusted 1.69 million in the week ending July 15. It is important to note that continuing claims are reported with a one-week lag.