New unemployment claims remained low in early August while continuing claims declined to 1.777 million, signaling a broadly stable labor market even as July employment fell and workforce participation weakened.
By yourNEWS Media Newsroom
Applications for unemployment benefits remained near historically low levels at the beginning of August, offering another indication that widespread layoffs have not taken hold despite a surprise decline in U.S. employment last month.
Initial jobless claims increased by 9,000 to a seasonally adjusted 209,000 during the week ending Aug. 8, according to Department of Labor figures released Aug. 13.
Economists had expected 202,000 claims.
The four-week moving average, which helps smooth short-term fluctuations in the weekly data, remained unchanged at 199,000.
Claims have generally ranged from 189,000 to 230,000 during 2026 and recently reached their lowest level since 1969 for the second time this year.
Continuing claims also moved lower.
The number of people still receiving unemployment benefits declined to 1.777 million, below expectations and down from a downwardly revised 1.799 million during the previous week.
Continuing claims can provide insight into hiring conditions because they measure how many people remain on unemployment benefits after initially losing work. A decline can indicate that fewer people are remaining unemployed for extended periods.
The latest claims data contrast with July’s headline employment report, when the economy unexpectedly lost 23,000 jobs.
Despite that decline, the unemployment rate edged down to 4.1%.
Summer employment reports can also be affected by seasonal adjustments, including changes associated with school schedules and other recurring summertime employment patterns.
Chicago Federal Reserve President Austan Goolsbee has argued that inflation remains a more pressing concern than deterioration in the labor market.
“The biggest problem facing our economy right now is not the collapse of industry and the collapse of jobs; it’s that the prices have been rising too fast,” Goolsbee said in an Aug. 11 video published by Wired. “We got an inflation problem, and people hate inflation.”
Goolsbee, who is not currently a voting member of the Federal Open Market Committee, pointed to relatively low layoffs, the unemployment rate and hiring trends in describing employment conditions as “stable, without being good.”
Recent inflation figures have provided some evidence of moderation.
Annual consumer inflation slowed to 3.4% in July from 3.5% previously.
Core inflation, which excludes volatile food and energy prices and is often used to gauge underlying price pressures, declined to 2.5% from 2.6%.
Those inflation readings, combined with the latest labor data, will factor into the Federal Reserve’s deliberations ahead of its Sept. 15-16 policy meeting.
Investors currently expect policymakers to leave interest rates unchanged in September.
The Fed will receive another round of August employment and inflation figures before making that decision.
Some economists nevertheless remain concerned that July’s job decline could be an early warning that employment conditions are beginning to soften.
“The loss of 23,000 jobs is another reason the Fed was right to hold off on raising rates in July,” Jamie Cox, managing partner for Harris Financial Group, told The Epoch Times in an emailed note. “While I expect this weakness to be temporary, the softening labor market remains one of my biggest concerns for the economy.”
Beyond unemployment claims, economists are also watching a decline in the proportion of Americans participating in the workforce.
Excluding the COVID-19 pandemic years of 2020 and 2021, the labor force participation rate has fallen to its lowest level since 1976.
Participation among prime-age workers between 25 and 54 has remained relatively stable.
The largest declines have instead occurred among people younger than 24 and workers age 55 and older.
Economists at RBC Economics said the pattern may reflect retirement rather than a surge in involuntary job losses.
“And interestingly, the number of persons out of the labor force who currently want a job declined which is suggestive that this could easily be a retirement story,” the economists wrote in an Aug. 7 research note. “Looking at flows into unemployment, most folks who exited the labor force were previously employed. This is more consistent with retirements than layoffs.”
That distinction is significant because a decline in labor force participation driven primarily by retirement would have different implications from one caused by widespread job losses or people unsuccessfully searching for work.
Businesses are also reporting continued demand for workers.
Small-business hiring plans have reached a four-year high, according to the National Federation of Independent Business’ July Small Business Optimism Index.
Finding qualified workers remains a substantial obstacle, however.
Twenty-seven percent of small-business owners identified “labor quality or availability” as their most important problem, indicating that some employers remain interested in expanding payrolls but are struggling to find people to fill available positions.
The combination of low initial claims, declining continuing claims and strong small-business hiring intentions suggests layoffs remain limited even after July’s decline in employment.
At the same time, falling labor force participation, the unexpected loss of 23,000 jobs and continued difficulty filling vacancies leave economists with competing signals about the labor market’s underlying direction.
For now, weekly claims continue to indicate relative stability, with new unemployment filings near historic lows and fewer than 1.8 million Americans receiving continuing benefits as the Federal Reserve prepares for its September interest-rate decision.
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