U.S. jobless claims fell last week, and the labor market remained tight due to strong demand for workers despite rising interest rates and tightening financial conditions.
Initial jobless claims fell by 8,000 to a seasonally adjusted 210,000 for the week ended May 21, the Labor Department said on Thursday (26), a decline that partially offset a climb the previous week, economists expected 215,000 people.
Others, however, believe that some retailers are laying off workers. including Walmart (WMT-US) last week cut their full-year profit forecasts, warning that inflation is squeezing profits.
The Fed has raised its policy rate by 75 basis points since March. The Fed is expected to raise rates by 0.5 percentage points at each of its June and July meetings.
In a separate report on Thursday, the Commerce Department confirmed that the economy contracted in the first quarter, weighed down by a record trade deficit and a slight slowdown in the pace of inventory accumulation compared with the fourth quarter.
U.S. inflation-adjusted first-quarter GDP fell 1.5% from the previous quarter, the report said, worse than expected and lower than the -1.4% initially reported. Consumer spending, which accounts for the majority of the economy, rose 2.7 percent from the initial estimate and was revised up to a 3.1 percent increase.