(Bloomberg) -- Applications for US unemployment benefits fell to the lowest level since May last week, signaling there is still a healthy demand for workers after recent storms and strikes.
Initial claims decreased by 4,000 to 217,000 in the week ended Nov. 9. The median forecast in a Bloomberg survey of economists called for 220,000 applications.
Jobless applications data have been even more volatile than usual recently as Southeastern states recovered from two hurricanes and Boeing Co. workers ended a weeks-long strike. At the current level, new claims are now below the average of the past two years.
The four-week moving average of new applications for unemployment benefits, a metric that helps smooth out volatility, declined to 221,000, according to Labor Department data released Thursday. That’s also the lowest figure since May.
Federal Reserve officials cut interest rates last week by a quarter percentage point, partially in an effort to maintain strength in the labor market.
Continuing claims, a proxy for the number of people receiving benefits, fell to 1.87 million in the week ended Nov. 2.
Before adjusting for seasonal factors, initial claims rose last week. California, New York and New Jersey saw the largest gains.
Michigan had a large decline in applications. Stephen Stanley, chief US economist at Santander US Capital Markets, said in a note that the drop is likely a sign that a wave of furloughs in the car industry last month is fading.
But there have been some recent high-profile job cut announcements. Among them, planemaker Boeing said it would reduce its workforce by about 17,000 employees and Nissan Motor Co. announced plans to dismiss 9,000 workers globally.
What Bloomberg Economics Says...
“After the Boeing Co. strike was resolved earlier this month, temporary layoffs or partial unemployment experienced by workers along the supply chain will likely unwind.
However, jobless claims will still come under pressure ahead from Boeing’s announcement that it will cut about 17k workers in mid-January. Together with job cuts at Stellantis NV, that suggests claims could spike in January. ”
—Eliza Winger
To read the note, see here.
Separate data Thursday showed that producer prices picked up in October, fueled in part by gains in portfolio management and other categories that feed into the Federal Reserve’s preferred inflation gauge. Consumer price data Wednesday also pointed to stubborn inflation pressures.
--With assistance from Maria Clara Cobo.
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