WASHINGTON (Reuters) – The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, pointing to a still low level of layoffs that could ease fears over the labor market’s health.
Initial claims for state unemployment benefits dropped 4,000 last week to a seasonally adjusted 218,000 for the week ended Sept. 21, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 225,000 claims for the latest week.
Though the labor market has lost momentum amid declining job openings and a step-down in hiring, layoffs have remained low and there are no signs of deterioration.
Claims have been mostly treading water since falling from an 11-month high of 250,000 in late July following temporary plant shutdowns in the automobile industry.
A strike by about 30,000 machinists at Boeing, which has forced the aerospace company to announce temporary furloughs of tens of thousands of employees, including what it said was “a large number of U.S.-based executives, managers and employees” could boost claims in the weeks ahead.
Striking workers are not eligible for unemployment benefits, but the work stoppage could cause employment disruptions at Boeing’s suppliers in addition to the temporary furloughs.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 13,000 to a seasonally adjusted 1.834 million during the week ending Sept. 14, the claims report showed.
The so-called continuing claims have dropped from more than 2-1/2-year highs touched in July, attributed to policy changes in Minnesota that allowed non-teaching staff in the state to file for unemployment aid during the summer school holidays.
The continuing claims data covered the week during which the government surveyed households for September’s unemployment rate. The jobless rate fell to 4.2% in August after rising to 4.3% in July. The increase in the unemployment rate from 3.4% in April 2023 as a surge in immigration boosted labor supply has raised fears of rapid labor market deterioration.
The Federal Reserve last week cut interest rates by 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, which Fed Chair Jerome Powell said was meant to demonstrate policymakers’ commitment to sustaining a low unemployment rate.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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