Initial applications for unemployment benefits decreased last week, showing that the job market in the United States is still tight and may be contributing to sustained inflation.
The Labor Department said Thursday that for the week ending October 14, there were 198,000 total weekly unemployment claims, seasonally adjusted. That was a drop of 13,000 from the previous week and fell short of the Dow Jones forecast of 210,000. Since January 21, it was the lowest weekly level.
Since the summer, claims have generally been declining, but some economists are concerned that may change. Recent weeks have seen an increase in announced layoffs, suggesting that the trend of declining claims may soon reverse.
The number of continuing claims, which are one week behind, was 1.734 million, which was higher than the FactSet forecast of 1.698 million and up 29,000 from the prior week.
In deciding on monetary policy, the Federal Reserve has considered the labor market extensively. Even after the central bank has increased rates 11 times for a total of 5.25 percentage points since March 2022, officials are concerned that a labor market that is still tight could continue to put upward pressure on pricing.
Markets were anticipating Fed Chair Jerome Powell’s speech later in the day, when he is anticipated to offer some direction on how policymakers should proceed.
Stock market futures were divided after the data, while Treasury yields remained higher.
The United Auto Workers strike and other labor disruptions have not yet had a significant impact on the labor market. Claims momentarily peaked throughout the summer but have since early August been gradually dropping, recently remaining in a range below 230,000.
The survey week that the Labor Department utilizes to compile its nonfarm payrolls report is covered by this week’s report.
In other economic news on Thursday, the Philadelphia Fed said that its manufacturing index increased by 5 points in October, but that it still fell short of expectations, coming in at -9, which is a contraction. Any value below zero suggests contraction since the study compares enterprises reporting expansion to those reporting contraction.
After being negative for the entire month of September, new orders, shipments, and employment all changed for the better.
