US Weekly Jobless Claims Decrease as Labor Market Regains Footing

Tiger Newspress
Yesterday

The number of Americans filing new claims for unemployment benefits fell last week, pointing to a firming labor market.

Initial claims for state unemployment benefits slipped 1,000 to a seasonally ​adjusted 197,000 for the week ended September 19, the Labor Department said on ‌Thursday. Economists polled by Reuters had forecast 201,000 claims for the latest week.

Claims are near 57-year lows, partly attributed to difficulties seasonally adjusting the data around moving holidays like Labor Day. Economists have also noted ​what they refer to as residual seasonality that tends to push claims lower as ​the year winds down.

Still, the underlying trend in claims remains in line ⁠with a labor market that has regained its footing after stumbling through much of the ​summer, anchored by low layoffs.

Companies, however, remain hesitant to ramp up hiring amid what economists ​describe as headwinds from rising energy prices because of the US-Israeli war with Iran as well as tariffs on imports. Worker shortages as an immigration crackdown and retirements shrink the labor supply are also hindering hiring.

A survey ​from S&P Global on Wednesday noted that companies in September were "also reporting increasing problems finding ​suitable staff."

The claims report showed the number of people receiving unemployment benefits after an initial week of aid, ‌a proxy ⁠for hiring, increased 2,000 to a seasonally adjusted 1.719 million during the week ended September 12.

The so-called continuing claims covered the period during which the government surveyed households for September's unemployment rate. Economists view continuing claims as consistent with a stable jobless rate. The unemployment rate was ​unchanged at 4.1% in ​August, though the ⁠data showed more people who had lost their jobs were experiencing long bouts of joblessness.

"After having been stable over the last few months, ​if continuing claims remain at lower levels, this could mean an unemployment ​rate closer ⁠to 4% over the next few months," said Veronica Clark, an economist at Citigroup. "But we would caution that a lower unemployment rate because of a smaller labor force would not necessarily imply ⁠a retightening ​labor market."

The Federal Reserve last week raised its overnight ​benchmark interest rate by 25 basis points to the 3.75%-4.00% range, the first hike in three years, and flagged ​further increases in borrowing costs in the months ahead.

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