The U.S. Labor Market Resilient Despite Rate Hikes
However, the housing market is wilting
The number of Americans filing new claims for unemployment benefits fell last week and the prior period's data was revised sharply lower, suggesting labor market conditions remain tight despite a slowdown in momentum due to higher interest rates.
The weekly unemployment claims report from the Labor Department on Thursday combined with strong industrial production in July and underlying retail sales growth to allay fears that the economy was in recession. The claims report, the most timely data on the economy's health, could give the Federal Reserve more ammunition to deliver another hefty rate hike next month.
"Fears of broad-based layoffs have yet to materialize," said Mahir Rasheed, a U.S. economist at Oxford Economics in New York. "Still, we doubt claims will accelerate sharply as labor demand remains well ahead of labor supply, while the outlook for the economy remains relatively positive despite elevated uncertainty regarding inflation and growth."
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