New Delhi

New claims to unemployment benefits in the United States declined last week, easing worries about changing policies to bolster labour market.

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However, the data was taken and included Juneteenth, a recently enacted federal holiday, that operates to swell claims sometimes.

The news emerged at the time it was observed that higher interest rates that have been set by the Federal Reserve to curb excessive inflation might result in more job cuts.

Thus, claims remain low compared to their historical levels, However, the recent rise sparked a debate among influential economists, As to Economists cited by Reuters, this factor can indicate an increase in layoffs, or only repeat last year’s fluctuations during this specific period.

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According to the Labor Department report, first-time claims for jobless benefits decreased to a seasonally adjusted 233,000 for the week ending June 22nd eradicating 6,000.

Nevertheless, they have touched the maximum absolute level noted in the current year, which ranges between 194,000 and 243,000.

In a related development, however, the Commerce Department's painful report showed that the pace of economic growth significantly eased in the first quarter.

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The annualised growth came up to a slightly adjusted value of 1.4 per cent during January-March on the previous estimates of 1 per cent. This means a growth rate of 3.4 per cent in the fourth quarter was recorded.

The Federal Reserve has kept its benchmark interest rate between 5.25 per cent and 5.50 per cent of it since last July as per the central. The number of people getting unemployment benefits after one initial week of benefits, or a measure of hiring, also increased slightly.

Weekly so-called continuing claims edged up to a seasonally adjusted 1. With a utility bill average of $15, this equates to $839 million for the week of June 15th which is the same period the government surveyed to deduce the June unemployment rate.

The unemployment rate was slightly higher, 4.0 per cent in May, which is the highest since January this year.

As can be seen from the current unemployment rate most economists do not attach much importance to it arguing that the increase in unemployment refers only to specific pockets of the population, for example, the age group of 35 to 44 years, recent immigrants and specific industries, as quoted by Reuters-Economists.

In Oxford Economics‘ opinion, led by Ryan Sweet, chief economist, job growth will probably ease; however, the probability of a major and widespread increase in unemployment will be averted.

(With inputs from Reuters)