U.S. Jobless Claims Slip to 197,000 in Week Ended Oct. 3 as Layoffs Stay Near 57-Year Lows
New applications for unemployment benefits fell 2,000 to a seasonally adjusted 197,000 for the week ended Oct. 3, the Labor Department said Thursday, holding near 57-year lows even as September hiring slowed sharply.
First-time claims for unemployment benefits edged lower last week, a sign that employers are still holding on to workers even as hiring cools, according to Labor Department data released Thursday and reported by Reuters.
Initial claims slipped 2,000 to a seasonally adjusted 197,000 for the week ended Oct. 3, according to Reuters. Economists polled by Reuters had expected 200,000 claims. Reuters reported that claims have now held near 57-year lows for four straight weeks.
A low-hire, low-fire labor market
The claims figures contrast with much weaker job creation. Nonfarm payrolls rose by just 29,000 in September, according to government data reported last week and cited by Reuters. Economists described the market to Reuters as “low-hire, low-fire”: layoffs remain historically low, while tepid hiring and a shrinking labor pool, amid retirements and an immigration crackdown, are holding back job growth.
Reuters reported that employers, backed by strong profit growth and stock market performance, have been hoarding workers but remain hesitant to add headcount, a trend economists tied first to tariff uncertainty and then to the U.S.-Israeli war with Iran, which has pushed diesel prices to record highs and lifted other commodity prices.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose 17,000 to a seasonally adjusted 1.716 million in the week ended Sept. 26, Reuters reported. The median duration of unemployment was 11.5 weeks in September, near a four-and-a-half-year high, a sign that those who do lose work are taking longer to find it.
What the data mean for the Federal Reserve
Minutes of the Federal Reserve’s Sept. 15-16 meeting, published Wednesday, showed officials judged labor market conditions to be stable and viewed the market as close to maximum employment, with risks broadly balanced, according to Reuters. The central bank raised its benchmark rate by a quarter point last month to a range of 3.75% to 4.00%, its first increase in three years, and signaled further increases could follow.
Reuters reported that the soft September payroll gain and cooler-than-expected inflation readings for July and August have diminished the odds of another rate increase at this month’s meeting, with economists expecting the Fed to raise rates in December instead.
Reporting based on coverage by Reuters.
