New US jobless claims fell far below market expectations, dropping to their lowest level in about 57 years. With inflation concerns resurfacing amid a recent surge in oil prices, the labor market has also remained stronger than expected, drawing attention to the future path of interest rates set by the US Federal Reserve (Fed).
The US Department of Labor said on the 23rd that new jobless claims for the week of July 12-18 totaled 187,000. That figure marked a decrease of 22,000 from the previous week and the lowest level since the week of Aug. 31-Sept. 6, 1969, when claims totaled 182,000. It also fell well below the expert forecast of 210,000 compiled by Bloomberg.
Continuing jobless claims, which count those who have filed for unemployment benefits for two or more weeks, also fell to 1.796 million for the week of July 5-11, down 2,000 from the previous week.
The data is seen as an indication that the US labor market is maintaining a much healthier trend than expected. While job growth has slowed somewhat, layoffs have also remained at historically low levels, keeping the labor market in a balanced state, analysts said.
With the labor market showing such resilience and oil prices surging, attention is expected to focus on the Fed's future monetary policy. If prices are rising while the job market remains healthy, there is little reason to hesitate over raising interest rates. On this day, Iran-backed Houthi rebels in Yemen attacked a Saudi Arabian oil tanker in the Red Sea, pushing Brent crude futures above $100 a barrel. It was the first time Brent had topped the $100 mark in about two months since May 26, raising concerns that energy-driven price pressures could build again.
The Fed will hold its Federal Open Market Committee (FOMC) meeting on the 28th and 29th to decide the benchmark interest rate. The rate is widely expected to be held steady at this meeting. However, the market anticipates at least one additional rate hike within the year.
