US Jobless Claims Fall to Lowest Level in 7 Weeks

Meanwhile, recurring jobless claims—at the highest level in nearly four years—keep rising.

A hiring sign at a coffee shop in Greensboro, N.C., on Sept. 19, 2024. Madalina Vasiliu/The Epoch Times

The number of Americans filing for first-time unemployment benefits declined for the fourth straight week, in a sign that the U.S. labor market remains resilient.

According to the Department of Labor, initial jobless claims fell by 5,000 to 227,000 for the week ending July 5, the lowest since the middle of May.

This is down from the previous week’s downwardly adjusted 232,000, and came in below the consensus estimate of 235,000.

The four-week average, stripping out week-to-week volatility, tumbled to 235,500 from 241,250.

Jobless claims for federal workers decreased by 15 to 438. Economists have closely monitored this program over the past several months to determine the Trump administration’s impact on the government workforce.

Continuing jobless claims—the number of unemployed individuals currently receiving jobless benefits—rose to a smaller-than-expected 1.965 million, from a downwardly revised 1.955 million. This is the highest level since November 2021.

Monitoring Help-Wanted Signs

Overall, the U.S. labor market has been resilient amid economic uncertainty. But while employment conditions remain intact, there is still consternation among businesses, workers, and market-watchers.

“The labor market looks to be stable in the near-term, but we see ‘choppy waters’ on the horizon that could serve to significantly disrupt recent positive employment trends,” economists at LPL Research said in a mid-year outlook.

Economists pointed to the Federal Reserve’s latest Beige Book, a periodic report summarizing economic conditions across the central bank’s 12 districts. The report cited weakening labor demand, declining hours, personnel reduction plans, and hiring pauses.

“Given this, it is not difficult to see lower payroll numbers in the coming months, especially if we do not get more clarity on international trade policy,” LPL Research added.

Workers are also feeling down about the labor market, according to the latest Glassdoor Employee Confidence Index.

The monthly report revealed that the share of employees reporting a positive six-month business outlook declined to 43.6 percent in June, down from 44.4 percent in the previous month.

“As the job market has steadily cooled, worker sentiment has slumped further. Even though the job market hasn’t fallen off a cliff, economic anxiety is still gripping workers,” Daniel Zhao, lead economist at Glassdoor, said in the report.

Still, these concerns have yet to appear in the data.

In June, the U.S. economy added a much better-than-expected 147,000 new jobs, and the unemployment rate slid to 4.1 percent.

Global outplacement firm Challenger, Gray, and Christmas reported that planned job cuts totaled 47,999, the lowest number of the year, and down 48 percent from May.

According to the Bureau of Labor Statistics, the number of new hires and layoffs was little changed in May. At the same time, job openings increased to nearly 7.8 million.

“The June jobs report is like a summer blockbuster—plenty of action and a surprise twist. Despite tariffs, D.C. drama, and global headwinds, the U.S. labor market just pulled off a better-than-expected performance,” Gina Bolvin, president of Bolvin Wealth Management, said in an email to The Epoch Times.

These numbers, Bolvin says, suggest that “Main Street is still marching forward—even if Wall Street keeps glancing nervously at the Fed.”

Federal Reserve Has Patience

The Federal Reserve’s dual mandate consists of maximum employment and price stability.

Since President Donald Trump’s sweeping global tariff plans, the twin objectives have been intensely scrutinized. While the president has repeatedly demanded aggressive interest rate cuts, the central bank has insisted that it can afford to be patient to determine if there are any adverse outcomes from the administration’s trade policy changes.

Minutes from the June Federal Open Market Committee policy meeting highlighted that officials believe it would be appropriate to reduce the benchmark federal funds rate—a key rate that influences borrowing costs for businesses, consumers, and the government—later this year, as tariff-driven inflation will likely be “temporary or modest.”

“Participants generally agreed that, with economic growth and the labor market still solid and current monetary policy moderately or modestly restrictive, the Committee was well positioned to wait for more clarity on the outlook for inflation and economic activity,” the meeting summary stated.

At last month’s meeting, the institution left its target rate in the range of 4.25 to 4.5 percent for the fourth consecutive meeting, and investors are betting that the monetary authorities will leave rates intact at the July 29–30 meeting.

CME FedWatch Tool data indicate that the futures market expects the Fed to follow through on a quarter-point rate cut in September, the first since December 2024.