Applications for unemployment benefits in the United States dropped last week, now matching their lowest level since July. Of course, this is a definite sign that the US labor market is healthy despite a slight slowdown in hiring.
Indeed, jobless claims fell by 8,000—to reach 252,000—during the week of September 17th, according to the US Labor Department report, Thursday. Not only did this reach its lowest level since April, but this is the largest drop in applications since early July.
In addition, unemployment benefit applications are now close to a four-year low now that companies are focused on filling open positions (and no longer trimming personnel fat). And perhaps even more good news, officials at the Federal Reserve now project that the labor market will “strengthen somewhat further” when announcing a decision to wait on raising rates; it is still somewhat likely that they will do so, perhaps by year end.
Indeed, TD Securities LLC interest rate strategist Gennadiy Goldberg “It’s a pretty solid sign. It reinforces what the Fed has been saying and reinforces their bias toward hiking rates in the near future.”
Similarly, the Bloomberg survey estimates range from 255,000 to 270,000. Last week, the reading remained at 260,000.
Now, unemployment benefit filings have remained under 300,000 for 81 weeks straight. That is the longest streak since 1970 and is a level that economists say is quite typical for a healthy labor market. Also, the four-week average of claims—a measure less volatile than the weekly average—fell from 260,750 to 258,500.
Looking more closely, the number of Americans receiving unemployment benefits fell by 36,000 to reach 2.11 million last week, which is the lowest it has hit since May. Furthermore, the unemployment rate among those who are eligible fell from 1.6 to 1.5 million.
Overall, then, US unemployment is holding steady at 4.9 percent. Employers have steadily added 204,000 jobs every month over the course of the last month, with hiring actually slowing to only 151,000. That means, of course, there are more openings than there are applications, which goes along with the numbers for economic growth: an unimpressive 1.1 percent annual pace, from April to June.
In an entirely separate report, the US Department of Labor reported earlier that job openings increased by 4 percent, in July, though hiring hit only 1 percent. This means that employers are definitely hiring but they are looking for more qualified workers.