WASHINGTON — The U.S. labor market continued to show resilience in mid-July despite persistent global economic uncertainty, with new claims for unemployment benefits falling to their lowest level in 10 weeks, reinforcing evidence that layoffs remain limited even as hiring has moderated.
The Labor Department reported that initial claims for state unemployment benefits fell by 8,000 to a seasonally adjusted 208,000 in the week ended July 11, below economists' expectations. Continuing claims, a measure of the number of people receiving ongoing unemployment benefits, declined by 16,000 to 1.805 million in the previous week, indicating many unemployed workers continue to find jobs.
The latest figures follow the Bureau of Labor Statistics' June employment report, which showed nonfarm payrolls increased by 57,000 while the unemployment rate held at 4.2%, reflecting a labor market that remains stable but is expanding at a slower pace than earlier in the year. Employment continued to grow in professional and business services, health care and social assistance, while leisure and hospitality shed jobs. The report also included downward revisions to payroll gains for April and May.
Economists have described current conditions as a "slow hire, slow fire" environment, with employers generally reluctant to reduce staff despite heightened uncertainty stemming from global trade tensions, geopolitical risks and elevated borrowing costs. At the same time, many businesses remain cautious about expanding payrolls.
The Federal Reserve's latest Beige Book indicated employment increased modestly to solidly in five of its regional districts through early July, while seven districts reported little or no change in hiring. The survey also highlighted ongoing shortages of skilled workers, particularly technicians and tradespeople, even as broader labor demand has cooled.
Separate data from the National Federation of Independent Business showed more small business owners reported difficulty filling open positions in June, suggesting labor shortages persist in parts of the economy despite slower overall job creation.
Some economists caution that headline indicators mask uneven conditions across industries. Hiring in sectors such as technology and some white-collar occupations has remained subdued, while health care and selected service industries continue to support employment growth. Analysts also note that the decline in the unemployment rate partly reflected a smaller labor force rather than stronger hiring.
The next closely watched U.S. employment report, covering July payrolls, is scheduled for release by the Bureau of Labor Statistics on Aug. 7.
