KVIG Informative

The labor market keeps sending calm signals even as the war economy behind it gets louder — layoffs remain rare, but the price of that stability is being paid at the gas pump.

Initial claims for unemployment benefits fell by 6,000 to a seasonally adjusted 206,000 for the week ending August 15, the Labor Department reported Thursday, coming in below the 210,000 economists polled by Reuters had forecast.

The four-week average of claims, a smoother measure of the underlying trend, ticked up slightly to 204,000. Claims have held in a historically low range of roughly 189,000 to 230,000 all year, and the national unemployment rate ticked down to 4.1% last month.

The steadiness comes despite a surprise contraction in July payrolls and despite a surge in oil prices tied to the ongoing conflict between the U.S., Israel and Iran, which has pushed energy costs sharply higher since fighting resumed earlier this summer.

Chief economist Carl Weinberg said the labor market has yet to show any sign of wear and tear from the surge in oil prices tied to the war, a sign employers are absorbing higher energy costs for now rather than cutting staff.

Claims filed specifically by former federal employees rose to 449 for the latest week, continuing a pattern tied to the Trump administration’s ongoing reduction of the federal workforce, though the federal figures remain a small share of the national total.

The Federal Reserve has held interest rates steady through its recent meetings, and the combination of a stable job market and moderating core inflation gives policymakers room to keep rates unchanged at their September meeting, according to economists tracking the data.

The picture emerging from the data is a labor market absorbing a war-driven cost shock without yet cracking. But that qualifier is doing real work: continuing claims, a gauge of how long people stay unemployed once they lose a job, have been drifting upward for weeks — a slower-moving signal that a market still technically calm is not necessarily a market still comfortable.