(Bloomberg) -- Applications for US unemployment benefits fell to a four-month low, remaining muted despite a recent slowdown in hiring.
Initial claims decreased by 4,000 to 218,000 in the week ended Sept. 21, according to Labor Department data released Thursday. The median forecast in a Bloomberg survey of economists called for 223,000 applications.
Continuing claims, a proxy for the number of people receiving benefits, ticked higher to 1.83 million in the week ended Sept. 14 following a downward revision to the prior week’s figures, though they remain below the levels reached from June to August.
The four-week moving average, a metric that helps smooth out volatility in the data, fell to 224,750, the lowest since June.
Separate data published simultaneously on Thursday showed monthly durable goods orders were stronger than expected, and gross domestic product grew faster in 2022 and 2023 than previously reported. US Treasury yields rose after the releases while S&P 500 futures and the dollar were little changed.
Jobless claims have stayed low in recent months despite a rise in the unemployment rate and slowdown in the pace of job creation. Economists say that’s because workers eligible for such benefits have not been losing their jobs.
Though weekly filings remain low, multiple large companies have announced or implemented plans this month to scale back their workforces. Paramount Global carried out a second round of layoffs Tuesday. General Motors Co. announced last week that it would temporarily lay off two-thirds of the workers at an assembly plant in Kansas until mid-2025.
What Bloomberg Economics Says...
“Initial jobless claims remain consistent with a relatively low rate of firing. However, with the recent rise in the unemployment rate driven by increased supply of workers — many of them undocumented and not eligible for unemployment insurance — they provide only limited value for forecasting the labor market.”
— Eliza Winger, economist
To read the full note, click here
If layoffs increase in the coming months and more Americans find themselves unemployed, Federal Reserve officials would likely consider reducing interest rates faster than they currently envision.
Initial claims, before adjustment for seasonal factors, fell by 5,957 to 180,878. Texas and New York registered the biggest declines.
(Updates with market reaction in fifth paragraph.)
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