New claims for unemployment benefits declined last week, indicating that the labor market remains resilient and demand for American workers is high.
Initial applications, a proxy for layoffs, fell by 4,000 to 226,000 in the week ended June 13, according to Labor Department Data released Thursday.
Although claims have lifted from the extreme lows seen last month, they remain low by historic standards. The gas price shock has not had a visible impact on the labor market. Over the past three months, employers have added an average of 188,000 workers to payrolls. The unemployment rate has remained mostly unchanged at 4.3 percent throughout the year, ticking above that to 4.4 percent in February but then falling back in March.
On Wednesday, the Department of Commerce released retail sales numbers that beat expectations and showed broad strength across the economy. Many economists had predicted that high gasoline prices would force consumers to reduce spending on other items. Instead, consumers have proven reslient, increasing spending even in beaten down sectors like home furniture—which has suffered due to the low level of home sales.
The Federal Reserve left its benchmark interest rate unchanged on Friday, a sign that officials remain confident that the economy will continue at full employment. Many investors now expect that the Fed will hike rates later this year, although the recent decline in oil and gasoline prices may ease fears of a revival of inflation.
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