U.S. labour market strong as Atlantic factory activity rebounds

The number of Americans filing applications for unemployment benefits increased moderately last week, pointing to still strong labour market conditions despite signs that economic activity was slowing.

Other data at the weekend showed factory activity in the mid-Atlantic region rebounded sharply in July, offering hope for a struggling manufacturing sector.

Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 216,000 for the week ended July 13, the Labour Department said, putting them in the middle of their 193,000-230,000 range for this year.

Data for the prior week was revised to show 1,000 fewer applications received than previously reported. Last week’s increase in claims was in line with economists’ expectations.

The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, dipped 250 to 218,750 last week.

The Labour Department said no claims were estimated last week. The claims data tends to be volatile around this time of the year because of summer factory closures, especially in the automobile industry, which occur at different periods.

This can throw off the model the government uses to strip out seasonal fluctuations from the data.

Layoffs remain low despite a bitter trade war between the United States and China, which has contributed to a dimming of the economy’s outlook and led the Federal Reserve to signal it would cut interest rates at its July 30-31 meeting for the first time in a decade.

Last week’s claims data covered the survey period for the nonfarm payrolls component of July’s employment report. The four-week moving average of claims was little changed between the June and July survey periods, suggesting steady job growth this month. The economy created 224,000 jobs in June.

The dollar held losses against a basket of currencies after the data, while US Treasury yields edged higher.

While the labor market remains strong, there are concerns that a shortage of workers and the Trump administration’s tougher stance on immigration could impede job growth.