US Labor Market Remains Stable Amid AI-Driven Productivity Gains

The US labor market remains stable, according to recent data. Initial claims for state unemployment benefits rose by 1,000 to a seasonally adjusted 199,000 for the week ended Aug 1.

Layoffs dropped to a two-year low in July, despite the oil price shock from the US-Israeli war with Iran.

The lack of labor market stress and contained wage pressures have given the Federal Reserve room to focus on the inflation fallout from the Middle East conflict.

Worker productivity grew faster than expected in the second quarter, curbing gains in labour costs. The labor share hit a record-low 52.9 percent last quarter.