Economic Report: Unemployment claims fall slightly to 229,000, but labor market might be cooling off

The numbers: New filings for unemployment benefits fell by 2,000 last week to 229,000 but remained near a five-month high, suggesting a slight cooling in a red-hot labor market as the U.S. economy slows.

Economists polled by the Wall Street Journal forecast initial jobless claims to total 225,000 in the seven days ended June 18. The figures are seasonally adjusted.

New filings had fallen to as low as 166,000 in late March — the second fewest on record — before moving modestly higher over the past few months.

The four-week average of new jobless claims, which smooths out the temporary ups and downs, rose to 223,500. That’s the highest level since the end of January.

Big picture: The number of layoffs fell to a record low earlier this year as companies sought to fill a record number of job openings — there’s two open jobs for every unemployed person in America.

Yet economists are watching closely to see if layoffs start to rise and hiring slows as the U.S. enters another turbulent period. The Federal Reserve is raising interest rates quickly to try to tame the worst inflation in 40 years, a strategy that’s likely to slow the economy and perhaps even trigger a recession.

Market reaction: The Dow Jones Industrial Average

and S&P 500

were set to open higher in Thursday trades.

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