US applications for jobless benefits fall to 213,000, remaining near 7-month lows

[November 22, 2024]  By MATT OTT

The number of Americans applying for unemployment benefits fell again last week, remaining near seven-month lows.

The Labor Department reported Thursday that jobless claim applications fell by 6,000 to 213,000 for the week of Nov. 16. That’s fewer than the 220,000 analysts forecast.

However, continuing claims, the total number of Americans collecting jobless benefits, rose by 36,000 to 1.91 million for the week of Nov. 9. That was higher than expected and the most in three years.

While the number of new people applying for jobless aid each week remains at historically healthy levels, some who are receiving benefits are finding it harder to land new jobs. That suggests that demand for workers is waning, even as the economy remains strong.

The four-week average of weekly claims, which quiets some of the weekly volatility, fell by 3,750 to 217,750.

Weekly applications for jobless benefits are considered a proxy for U.S. layoffs.

In response to some weakening employment data and receding consumer prices, the Federal Reserve slashed its benchmark interest rate in September by a half a percentage point and by another quarter-point earlier this month.

In September, Fed officials predicted that they would reduce their benchmark rate four times next year, on top of three rate cuts this year, but that outlook has changed quickly.

Several surprisingly strong economic reports, combined with President-elect Donald Trump’s policy proposals, have led to a decidedly more cautious tone from the Fed that could mean fewer cuts and higher interest rates than had been expected.

Hiring signs are displayed at a restaurant in Buffalo Grove, Ill., on Nov. 3, 2024. (AP Photo/Nam Y. Huh, File)

The central bank recently shifted its focus from taming inflation toward supporting the job market as it tries to execute a rare “soft landing,” whereby it brings down inflation without spurring a recession.

The half-point rate cut in September 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%.

Despite a slight uptick in October, inflation has retreated steadily the past two years, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.

The government reported in late October 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 October, the U.S. economy produced a meager 12,000 jobs, though economists pointed to recent strikes and hurricanes that left many workers temporarily off payrolls.

The Labor Department reported in August 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.

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