Applications for US unemployment benefits fell to their lowest level since May, highlighting the resilience of the labor market despite signs of a broader economic slowdown.
According to the Labor Department’s report on Thursday, initial jobless claims decreased by 12,000 to 219,000 for the week ending September 14, falling below economists’ expectations of 230,000.
This period aligns with the reference week used for the September employment report, providing an important snapshot of the labor market’s condition. The decline in jobless claims suggests that layoffs remain subdued, even as the US job market has cooled from the rapid hiring pace seen earlier this year.
Continuing claims, which track the number of people currently receiving unemployment benefits, also fell by 14,000 to 1.83 million, the lowest level in three months. Additionally, the four-week moving average of jobless claims, which helps smooth out weekly volatility, dropped to 227,500—its lowest since June.
Despite the healthy labor market, the Federal Reserve cut interest rates by a half percentage point on Wednesday, reflecting a shift in focus toward supporting the job market. Federal Reserve Chair Jerome Powell emphasized that while inflation has moderated, the Fed aims to avoid significant increases in unemployment as it works to stabilize prices. Powell noted that the labor market remains “solid” and expressed the Fed’s intent to manage inflation without triggering a recession.
Recent economic data has pointed to a gradual cooling in hiring. In August, US employers added 142,000 jobs, a modest increase compared to earlier in the year. This reflects a slowdown in hiring after months of aggressive rate hikes by the Federal Reserve aimed at curbing inflation. Job openings have also declined, and the unemployment rate has risen to a three-year high of 4.2%.
Bloomberg, Market Watch, and ABC News contributed to this report.
