WASHINGTON – The number of newly laid off workers filing claims for unemployment benefits dropped by a bigger-than-expected amount last week, signaling continuing labor market strength despite a general economic slowdown.
The government reported that applications for jobless benefits totaled 310,000, down 9,000 from the previous week. It was the biggest decline in seven weeks and was a larger improvement than analysts had been expecting.
Many businesses, faced with a slowing economy, have reduced their plans to hire new workers but so far have not resorted to large-scale reductions in existing payrolls.
The total number of jobless claims was the lowest since 299,000 people showed up at unemployment offices the week of July 22.
The government reported last week that the unemployment rate dipped to 4.7 percent in August, after having risen to a five-month high of 4.8 percent in July. Job creation picked up in August but still remained below the sizable gains recorded earlier in the year when the economy was growing more strongly.
Economic growth slowed to an annual rate of just 2.9 percent in the spring as the nation has struggled with soaring energy prices, a cooling housing market and rising interest rates.
The Federal Reserve reported further signs of a slowdown Wednesday, noting that five of its 12 regions experienced slower growth in late July and August.
After raising interest rates for 17 consecutive times over two years, the longest unbroken stretch of rate hikes in Fed history, the central bank passed up the chance for an 18th rate increase at their August meeting.
Many economists believe the Fed will remain on hold at its next meeting on Sept. 20 although some analysts are forecasting one or two more rate hikes later this year because of their belief that inflation will remain above the Fed's comfort zone.