US Labour Market Remains Stable as Jobless Claims Edge Higher

• The number of Americans filing for unemployment benefits rose marginally last week, pointing to stable labour market conditions and continued low layoffs. Initial claims increased by 2,000 to a seasonally adjusted 206,000 for the week ended August 29, broadly in line with economists’ forecast of 205,000.
• The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased by 8,000 to 1.779Mn for the week ended August 22. Economists continued to characterise the labour market as being in a “slow hire, slow fire” mode.
• Separately, planned job cuts by US-based companies increased 58% to 52,881 in August. However, this represented the lowest total for the month of August since 2022, while announced layoffs so far in 2026 were 41% below the corresponding period of 2025.
• Attention now turns to the August employment report due September 4. Economists expect nonfarm payrolls to rebound by 56,000 jobs, following a 23,000 decline in July, while the unemployment rate is expected to remain unchanged at 4.1%.
• The relatively stable labour market gives the Federal Reserve room to remain focused on inflation. However, Fed Governor Christopher Waller indicated that he was leaning towards keeping rates unchanged in September if upcoming inflation data confirm that price pressures are continuing to moderate.
• With layoffs remaining low and unemployment expected to hold at 4.1%, there is currently little evidence of significant labour-market deterioration that would force the Fed to ease policy. This leaves inflation developments as a key determinant of the Fed’s September decision, particularly after services input prices reached a three-year high in August.

(Source: Reuters)