U.S. Jobless Claims Fall to 194,000, Near 1969 Low
U.S. initial claims for unemployment benefits fell to 194,000 in the week ended October 17, near a level last reached in 1969. The four-week average also…
WASHINGTON — Weekly jobless claims near levels last seen in 1969 offer a fresh sign that U.S. layoffs remain subdued, even as hiring has struggled. Initial claims fell to 194,000 in the week ended October 17, and the four-week average reached its lowest level since that year.
The Labor Department report, released Thursday, suggests job growth may have picked up in October after a weak September. It also showed continuing claims rose, a reminder that low layoffs do not necessarily mean job seekers are finding work quickly.
Initial claims fell 6,000 from the previous week, according to the report. Economists polled by Reuters had forecast 200,000 claims. It was the sixth consecutive week claims had remained at or below the 200,000 mark.
Still low.
The latest figure is close to 189,000, reached in mid-July and the lowest reading since 1969. The four-week moving average, which smooths weekly fluctuations, dropped 1,000 to 197,750, also its lowest level since 1969.
The claims period overlapped with the government’s survey of businesses for the October employment report. The moving average fell between the survey weeks for September and October, a pattern economists said suggested payroll growth may have improved this month.
September payrolls rose by 29,000 jobs, following an increase of 133,000 in August. Economists said payrolls can underperform when Labor Day falls relatively late in the month, as it did in September. They continue to characterize the labor market as “low-hire, low-fire,” with uncertainty related to the war and import tariffs weighing on hiring.
Low layoffs, but hiring remains a concern
Economists cited strong profit growth and robust domestic demand as factors helping businesses hold on to workers. A smaller workforce, against a backdrop of retirements and immigration policies under the Trump administration, may also be limiting employers’ ability to replace staff.
“The administration's immigration policies may have tightened up the labor markets where companies are unable to find the help they need to produce their goods and services so they are holding tight to the workers they have,” said Christopher Rupkey, chief economist at FWDBONDS. “Workers are suddenly irreplaceable in many industries.”
For workers, the figures point to a market where losing a job remains relatively uncommon, but the claims data alone do not show how easily people who are out of work can secure another position. Continuing claims, which track people receiving benefits after an initial week of aid, increased 25,000 to 1.728 million in the week ended October 10.
That measure has limits. It excludes recent college graduates and others who cannot qualify because they have little or no work history. Some people who have been unemployed for a long time may also have used up benefits, which are limited to 26 weeks in most states.
The median duration of unemployment was 11.5 weeks in September, near a 4-1/2-year high. The unemployment rate stood at 4.2% that month. Economists said the labor market was not adding to inflationary pressure, reducing the need for the Federal Reserve to tighten monetary policy aggressively as it responds to inflation linked to the Middle East conflict.
The central bank raised its overnight benchmark interest rate by 25 basis points in September, bringing it to a range of 3.75%-4.00%. Economists expect the Fed to hold rates at its meeting next week and raise borrowing costs again in December.
“The Fed has a free hand to hike rates next week if it deems monetary tightening necessary to soften demand and increase slack to ensure a return to the inflation target,” said Carl Weinberg.
Financial markets were little moved by the claims report. Initial claims stood at 194,000.
Source: finance.yahoo.com
