A woman speaks to a potential employer at a New York state jobs fair. Strong hiring has reduced layoffs in the U.S. to the lowest level in decades. The numbers: More workers applied for unemployment benefits at the end of July, but the rate of layoffs in the U.S. clung near the lowest level in decades and showed no sign of rising. Initial jobless claims rose by 8,000 to 215,000 in the seven days ended July 27, the government said Thursday. Economists polled by MarketWatch estimated new claims would total a seasonally adjusted 210,000.
The more stable monthly average of new claims fell by 1,750 to 211,500. The four-week average usually gives a better read into labor-market conditions than the more volatile weekly number. What happened: The only state with a notable increase in jobless claims was Illinois. Claims fell in Michigan, Kentucky and Georgia. Claims often swing sharply in July in states such as Michigan with lots of auto production. Workers left idle when companies briefly shut plants to retool for new models are eligible for benefits in some states. New claims are still close to a half-century low, however. They bottomed out at 193,000 in mid-April and show no sign of a sustained rise. The number of people already collecting unemployment benefits, meanwhile, rose by 22,000 to 1.69 million. These so-called continuing claims are near a 40-plus year low. Read: Consumer confidence surges close to an 18-year high Big picture: Companies aren’t hiring as rapidly as they were last year and wage growth appears to have peaked, but the labor market is still pretty good. The economy is adding an average of more than 150,000 new jobs a month this year and the unemployment rate sits at a 50-year low. That’s why layoffs are so low. The economy is likely to continue expanding even in the face of stiffer headwinds as long as companies avoid mass layoffs and the vast majority of Americans continue to hold a job. On Friday, the government is expected to report the economy created about 171,000 new jobs in July. Read: Worker pay and benefits growing at slower pace in another sign of ebbing inflation What they are saying? “As we have noted over the past several weeks, claims are not likely to dip back under 200,000, nor are they likely to rise back above 230,000 for any appreciable length of time,” said Thomas Simons, senior money market economist at Jefferies LLC. “The labor market remains very tight, layoff activity is low, and there is no evidence in the economic data that suggests that these conditions will change any time soon.” Market reaction: The Dow Jones Industrial Average
and S&P 500
rose in early Thursday trades. Stocks fell on Wednesday after Federal Reserve Chairman Jerome Powell indicated the central bank might not cut interest rates again this year. The 10-year Treasury yield
was little changed at 2.04%.