U.S. Weekly Jobless Claims At One-Month Low

The number of Americans filing new applications for unemployment benefits dropped to a one-month low last week, suggesting that an orderly labor market slowdown remains in place.

Investors have been on edge after a jump in the unemployment rate to a near three-year high of 4.3% in July sparked fears that the economy was either in recession or nearing a downturn. I Photo: U.S. Department of Labor Facebook

This development dashed financial market hopes that the Federal Reserve could cut interest rates by 50 basis points next month, as reported by Lucia Mutikani for Reuters.

The economy's resilience was further reinforced by other data released on Thursday, which showed that retail sales increased by the most in nearly one and a half years in July.

Investors have been on edge after a jump in the unemployment rate to a near three-year high of 4.3% in July sparked fears that the economy was either in recession or nearing a downturn—concerns not shared by most economists.

"Fed officials need not worry themselves to death about the outlook because the downside risks to the economy are fading fast with fewer job layoffs and robust consumer spending," said Christopher Rupkey, chief economist at FWDBONDS.

"The economy is not going off the rails." Initial claims for state unemployment benefits dropped by 7,000 to a seasonally adjusted 227,000 for the week ended August 10, the Labor Department reported. Economists polled by Reuters had forecast 235,000 claims for the latest week.