Slightly more Americans apply for unemployment benefits last week, but layoffs remain at low levels
The number of Americans applying for jobless aid ticked up last week but layoffs remain at historically low levels.
The Labor Department reported Thursday that jobless claim applications rose by 3,000 to 221,000 for the week of Nov. 2. That’s fewer than the 227,000 analysts forecast.
The four-week average of weekly claims, which softens some of the week-to-week fluctuations, fell by 9,750 to 227,250.
Weekly applications for jobless benefits are considered representative of U.S. layoffs in a given week.
Continuing claims, the total number of Americans collecting jobless benefits, rose by 39,000 to 1.89 million for the week of Oct. 26. That’s the most since late 2021.
In response to weakening employment data and receding consumer prices, the Federal Reserve slashed its benchmark interest rate in September by a half a percentage point as the central bank shifted its focus from taming inflation toward supporting the job market. The Fed is hoping to execute 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%.
The Fed is expected to announce later Thursday that it has cut its benchmark borrowing rate by another quarter point.
Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
Last week, 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 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.
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. 2021.