Initial Jobless Claims fell by 20,000 in the latest week, reaching an eight-month low, with 201,000 people filing for unemployment benefits for the first time. Continuing Claims also declined by 21,000, with 1.662 million people still receiving benefits after filing their initial claim. This latter number has been trending lower since topping 1.861 million in early April, reflecting a mix of people finding new jobs and benefits expiring.

What’s the bottom line? While the tame level of Initial Jobless Claims suggests a strong labor market, these unemployment filings are usually the last data point to reflect a slowdown. Typically, we first see a decline in job postings, hirings, and a reduction in hours before layoffs occur and these first three trends have been seen in recent reports. It will be important to see if a sustained rise in Initial Jobless Claims follows in the coming months, especially with the Fed looking for clear signs that the labor market is softening as they consider further rate hikes this fall.