WASHINGTON: The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to sustained labor market strength even as the pace of job growth is slowing.
Despite signs of underlying labor market strength, also corroborated by record high job openings, August's slowdown in job growth, together with sluggish factory and services sector activity could encourage the Federal Reserve to keep interest rates unchanged at its Sept. 20-21 policy meeting.
"The labor market has not been this good since the 1970s. The Fed has operational risk," said Chris Rupkey, chief economist at MUFG Union Bank in New York. "Rates are a long way from normal levels and the Fed has no firepower to come to the aid of the economy if a recession were to hit."