The number of Americans filing new claims for unemployment benefits increased last week, suggesting some softening in the labor market, though overall conditions remain tight.
That was underscored by other data on Thursday showing a sharp decline in layoffs announced by U.S.-based companies in July. The still-low level of unemployment claims and brisk pace of hiring support views that the economy is not in recession despite gross domestic product contracting in the first half.
"The risk is that claims continue to drift higher as labor market conditions slowly cool, but we don't anticipate a sharp rise from current levels any time soon as demand for workers continues to outstrip supply," said Lydia Boussour, lead U.S. economist at Oxford Economics in New York.
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