© Archyde.com. Hundreds of people queue outside a Kentucky center to file for unemployment benefits, in a file photo from Archyde.com archive.
WASHINGTON (Archyde.com) – The number of Americans filing new claims for unemployment benefits fell to a two-month low last week, and layoffs fell in August, suggesting the Federal Reserve will need to keep raising interest rates sharply to slow the labor market. .
The Federal Reserve is raising interest rates significantly to tame inflation by curbing demand in all sectors of the economy.
On Thursday, the Labor Department said first-time applications for state unemployment benefits fell by 5,000 to a seasonally adjusted number of 232,000 in the week ending Aug. 27.
A survey conducted by the Institute for Supply Management on Thursday confirmed strong demand for workers and revealed a sharp recovery in employment in the manufacturing sector in August after three months of contraction.
The survey showed that “companies continued to hire at strong rates in August, with little evidence of layoffs, hiring freezes, or staff reductions through attrition.”
The data for the previous week was revised to show a decrease of 5,000 orders from what was previously announced. Economists polled by Archyde.com had expected 248,000 orders in the last week.
Despite the large increases in interest rates approved by the Federal Reserve to curb inflation, which raised the risk of a recession, there are no signs yet of widespread layoffs.
Demands remain below the 270-300K range that economists say indicates an actual slowdown in the labor market.
The government said this week that 11.2 million jobs were created at the end of July, with two jobs for every unemployed person. The flexibility of the labor market continues to dispel fears that the economy is in recession after the GDP contraction in the first half of the year.
The survey confirmed the evidence that the economy is expanding. The manufacturing PMI remained stable at 52.8 points last month. A reading above the 50 threshold indicates an expansion in the manufacturing industries, which represent 11.9 percent of the US economy.
Five of the six largest manufacturing sectors, including machinery and transportation equipment, computer and electronic products, posted moderate to strong growth.
Economists still expect job growth to slow, especially as worker productivity continues to decline at unsustainable rates, putting further pressure on labor costs.
(Prepared by Doaa Muhammad and Noha Zakaria for the Arab Bulletin – Editing by Ahmed El-Sayed)