The U.S. job market remains robust! Initial jobless claims have declined for six consecutive weeks to a new low since mid-April

According to the Zhitong Finance APP, despite weak hiring making it difficult for many laid-off employees to find new opportunities, the number of initial jobless claims in the U.S. unexpectedly fell last week, indicating that the labor market remains stable. Data released on Thursday showed that the number of initial jobless claims in the U.S. for the week ending July 19 was 217,000, marking a decline for the sixth consecutive week and remaining at the lowest level since mid-April, below the market expectation of 226,000 and the previous value of 221,000. Additionally, the number of continuing jobless claims for the week ending July 19 slightly decreased to 1.955 million, below the market expectation of 1.96 million and the previous value of 1.956 million.

The number of initial jobless claims has retreated after soaring to an eight-month high in June. Although some layoffs have occurred, employers overall remain reluctant to cut jobs, choosing instead to slow down hiring until U.S. President Trump's protectionist trade policies become clearer. While the labor market remains robust, companies' hesitation to increase hiring has left many unemployed individuals facing prolonged periods of unemployment.

However, there is still a risk that the number of initial jobless claims may rise again. Data on initial jobless claims in July typically sees an increase, partly due to the annual shutdown schedules of auto assembly plants, whose uncertain timelines may disrupt the government's seasonal adjustment data models. In this regard, Citigroup economist Gisela Young stated, "As long as the number of initial jobless claims remains within the recent range, even if it rises, it is not a cause for concern."

Although the pace of job growth has slowed compared to last year, the labor market remains stable, providing the Federal Reserve with room to delay restarting interest rate cuts, allowing it to continue monitoring whether tariffs will exert inflationary pressure. Economists expect the Federal Reserve to maintain the benchmark overnight interest rate at 4.25%-4.50% during its meeting next Wednesday.

While the labor market remains strong, companies' hesitation to increase hiring has left many unemployed individuals facing prolonged periods of unemployment. Some economists have indicated that persistently high continuing jobless claims may push up the unemployment rate. The market generally expects that the U.S. non-farm payroll report for July, to be released next week, will show a slight increase in the unemployment rate to 4.2%. Economists also predict that hiring activity will slow down, with some even forecasting that the U.S. non-farm payrolls for July will show zero new jobs added.

Due to a decrease in immigration inflows leading to a decline in labor supply, the economy currently only needs to add about 100,000 or even fewer jobs per month to meet the growth needs of the working-age population. Goldman Sachs economist Elsie Peng noted in a report, "Looking ahead, we expect that as immigration gradually decreases, the 'breakeven job growth rate' (the number of jobs needed to keep the unemployment rate stable) will decline from the current estimate of 90,000 per month to 70,000 per month by the end of 2025."