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Key Takeaways
- Initial jobless claims dropped from the prior week to 219,000, surprising economists who forecasted that new unemployment filings would be larger.
- The data showed that while job creation may be slowing, layoffs haven’t been accelerating.
- The improved results come after the Federal Reserve moved interest rates lower to help boost the labor market, but economists said the data was unlikely to alter the central bank’s course on rate cuts.
New unemployment insurance claims fell 12,000 last week, coming in at their lowest levels since May.
Initial jobless claims for the week ending Sept. 14 were 219,000, Labor Department data showed, coming in lower than the prior week. Economists surveyed by the Wall Street Journal and Dow Jones Newswires projected a reading of 229,000, nearly the same as last week. The decline in the more volatile weekly number pushed the four-week moving average down to 227,500.
Job Creation Slowing, But Few Worker Layoffs
Market watchers are closely following the labor market, which has shown signs of slowing.
Economists and Federal Reserve officials have raised concerns about recent weakness. But today’s data showed that the jobs market remained steady, with wages and labor demand showing signs of coming into better balance, said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“Weekly claims remain very low and in a range that is comparable to year-ago numbers, signaling limited change in the pace of layoffs despite notable slippage in the pace of job creation and moderation in the pace of economic momentum,” Baird said.
The dip in jobless claims comes after the Federal Reserve pointed to the labor market as it delivered a 50-basis-point (bps) cut to its influential fed funds rate on Wednesday. However, economists didn’t expect it to change the central bank’s path ahead.
“The Federal Reserve yesterday sent a strong signal that it will likely lower rates another 50bps this year to preserve current labor market conditions and one week’s claims data doesn’t alter that,” said Nancy Vanden Houten, senior U.S. economist at Oxford Economics.