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The
four-week average of weekly claims, which quiets some of the
week-to-week fluctuations, fell by 2,250 to 236,500.
Weekly applications for jobless benefits are considered a proxy
for U.S. layoffs.
In response to weakening employment data and receding consumer
prices, the Federal Reserve cut its benchmark interest rate in
September by a half of a percentage point as the central bank
shifted its focus from taming inflation toward supporting the
job market. The Fed is trying to pull off a rare “soft landing,”
whereby it brings down inflation without tipping the economy
into a recession.
It was the Fed’s first rate cut in four years after a series of
increases starting in 2022 that pushed the federal funds rate to
a two-decade high of 5.3%.
Inflation has retreated steadily, approaching the Fed’s 2%
target and leading Chair Jerome Powell to declare recently that
it was largely under control.
Also Thursday, the government reported that an inflation gauge
closely watched by the Fed fell to its lowest level in
three-and-a-half years.
During the first four months of 2024, applications for jobless
benefits averaged just 213,000 a week before rising in May. They
hit 250,000 in late July, supporting the notion that high
interest rates were finally cooling a red-hot U.S. job market.
In August, the Labor Department reported that the U.S. economy
added 818,000 fewer jobs from April 2023 through March this year
than were originally reported. The revised total was also
considered evidence that the job market has been slowing
steadily, compelling the Fed to start cutting interest rates.
Despite some signs of labor market slowing, America’s employers
added a surprisingly strong 254,000 jobs in September, easing
some concerns about a weakening job market and suggesting that
the pace of hiring is still solid enough to support a growing
economy. The Labor Department issues its October jobs report on
Friday.
Continuing claims, the total number of Americans collecting
jobless benefits, declined by 26,000 to 1.86 million for the
week of Oct. 19. Last week's figure, which had been the most in
three years, was revised down by 12,000.
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