US initial jobless claims fall, labour market continues to soften
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The news: While the number of Americans filing new applications for unemployment benefits dropped last week, the US labour market continues to soften as demand for and supply of workers weakens.
The numbers: Initial claims for unemployment benefits fell 33,000 to a seasonally adjusted 231,000 for the week ending 13 September, according to data released by the US Labor Department on Thursday. The decline is the largest drop in nearly four years. The median forecast in a Bloomberg survey of economists called for 240,000 applications.
The decline slightly reversed a surge the week prior, which had pushed claims to levels last seen in October 2021.
Continuing claims, the proxy gauge for the number of people receiving benefits, declined to 1.92 million in the previous week.
The context: The overall drop in initial claims suggests that companies are still holding on to workers as macro uncertainty persists. A slowdown in the pace of job growth and cooling in both supply and demand for workers indicates that the US labour market is softening.
On Wednesday, the Federal Reserve cuts rates by an expected quarter point to 4% to $4.25%, with chair Jerome Powell stating: “The labour market has softened. The case for there being a persistent inflation outbreak is less.” Powell pointed to data showing hiring had fallen sharply in recent months even as the jobless rate had remained low.
The sources: US Department of Labor, Bloomberg
