The number of Americans filing for unemployment benefits fell last week, pointing to a tightening labour market that likely keeps the Federal Reserve on course to announce plans next month to start reducing its massive bond portfolio.
Labour market strength was also underscored by another report on Thursday showing U.S.-based employers in July announced the fewest job cuts in eight months. But a slowdown in services sector activity last month put a wrinkle on the economy’s brightening prospects.
Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 240,000 for the week ended July29, the Labour Department said. Economists had forecast claims falling to 242,000.