US weekly jobless claims near 57-year lows at 194,000
US initial jobless claims fell 6,000 to a seasonally adjusted 194,000 for the week ended 17 October, approaching 57-year lows. Economists cited strong domestic demand shielding workers from layoffs, though risks from the Iran war, tariffs and higher interest rates could undercut the labour market in
The number of Americans filing new claims for unemployment benefits dropped to near 57-year lows last week, pointing to low layoffs and labour market stability, the US Labor Department said on 22 October.
Initial claims for state unemployment benefits fell by 6,000 to a seasonally adjusted 194,000 for the week ended 17 October, the department said. Economists polled by Reuters had forecast 200,000 claims for the latest week. The reading is within striking distance of the 189,000 level touched in mid-July, which was the lowest since 1969.
Economists said rising profits amid strong domestic demand were shielding workers from layoffs. However, they expressed worries that tightening financial conditions and higher interest rates as the US-Israeli war with Iran fuels inflation could undercut the labour market next year.
The claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls component of October's employment report. Payrolls increased by 29,000 jobs in September after rebounding by 133,000 in August. Payrolls tend to underperform when Labor Day falls relatively late in the month, as was the case in September. Economists continue to view the labour market as still in a 'low-hire, low-fire' state, but uncertainty from the war and tariffs on imports has stymied hiring.
The claims report showed the number of people receiving unemployment benefits after an initial week of aid—a proxy for hiring—increased by 25,000 to a seasonally adjusted 1.728 million during the week ended 10 October. The so-called continuing claims do not include recent college graduates and others who are ineligible for benefits due to little or no work history. Some long-term unemployed people may have exhausted their eligibility, which is limited to 26 weeks in most states, keeping continuing claims at low levels. The median duration of unemployment was 11.5 weeks in September, near a 4-1/2-year high. Still, with the unemployment rate at 4.2 per cent in September, the labour market is not a source of inflation.
Economists said that reduced the need for the Federal Reserve to aggressively tighten monetary policy as it battles the inflation fallout from the Middle East conflict. The US in September raised its overnight benchmark interest rate by 25 basis points to the 3.75-4.00 per cent range. Economists expect the Fed to stay pat at its meeting next week and hike borrowing costs again in December.