In the United States, the number of initial claims for unemployment benefits for the first time each week continues to decline, reaching near the lowest level in 57 years, indicating that the labor market in the United States is maintaining a strong stance.
According to the report by the U.S. Department of Labor on Thursday (September 24), for the week ending September 19, the seasonally adjusted first-time claims for unemployment benefits nationwide were 197,000, a decrease of 1,000 from the revised 198,000 of the previous week, marking one of the lowest levels since 1969. This data is also well below the expectations of economists. Economists surveyed by Reuters and The Wall Street Journal had previously expected the number of claims last week to be 201,000.
The data for continued claims for unemployment benefits lags by one week. For the week ending September 12, the total number of people in the United States receiving unemployment benefits was 1.72 million, nearing the lowest level since 2023.
The four-week moving average of initial claims for unemployment benefits nationwide also dropped to 202,250 last week, marking the lowest level in six weeks. The four-week moving average helps to smooth out fluctuations in the data from week to week.
Over the past few months, the number of initial claims for unemployment benefits has been hovering near historically low levels, with companies reluctant to lay off employees and hiring rates remaining slow, keeping the U.S. labor market in a state of “low hiring, low firing,” a trend seen for most of the past few years.
The data for last week’s claims includes figures around the Labor Day holiday in the United States, making seasonal adjustments more challenging and potentially volatile. Nonetheless, the overall decreasing trend in unemployment claims aligns with the situation in the labor market. While the U.S. labor market was relatively weak during much of this summer, recent data suggests that it is now recovering steadily.
The weekly initial claims for unemployment benefits are often seen as an indicator of layoffs in companies and a real-time gauge of the health of the U.S. job market. The Department of Labor’s report on Thursday indicates that layoffs in companies are still at historically low levels.
However, at the same time, due to various “headwinds” affecting the U.S. economy, such as rising energy prices due to the Iran conflict, tightening immigration policies, and a decrease in labor supply resulting from the retirement wave, companies remain cautious about expanding hiring.
A survey released by S&P Global on Wednesday stated that in September, companies also reported “encountering increasing difficulties in finding suitable employees.”
The Federal Reserve raised interest rates for the first time in three years last week, increasing the benchmark rate by 25 basis points to the range of 3.75%-4.00%. However, the inflation rate still exceeds the Fed’s 2% target, so if the labor market remains strong while inflation remains high, the Federal Reserve may still consider rate hikes in the coming months.
(Reference: Reuters)