US jobless claims decline to lowest level since mid-April

[WASHINGTON] Applications for US unemployment benefits unexpectedly fell last week to the lowest since mid-April, remaining relatively subdued amid economic uncertainty.

Initial claims decreased by 6,000 to 216,000 in the week ended Nov 22. The median forecast in a Bloomberg survey of economists called for 225,000 applications. 

Continuing claims, a proxy for the number of people receiving benefits, edged up to 1.96 million in the previous week, according to Labor Department data released on Wednesday (Nov 26).

Wednesday’s figures indicate employers are still largely retaining current employees as they have pulled back on bringing in new hires. Though there have been an increasing number of job cut announcements by large companies in recent weeks, including Verizon Communications and Amazon.com, there hasn’t been a notable pickup in actual layoffs yet.

Recurring claims have largely trended upward since September and remain near levels last seen when the labour market was recovering from the pandemic. Though the level of initial applications remains subdued, it has become harder for those who are already unemployed to find a new job.

The weekly claims data are prone to swings around holidays, such as Thanksgiving. On an unadjusted basis, initial claims jumped last week.

Recent surveys show Americans are increasingly worried about the labour market. A measure of consumer confidence in November fell by the most in seven months, partially due to more downbeat prospects for finding a job.

Similarly, a Harris Poll conducted for Bloomberg News in October showed that 55 per cent of employed Americans are concerned about losing their jobs, and almost half said they believe it would take them four months or longer to find a new job of similar quality if they lost their current position.

Federal Reserve officials lowered interest rates at their last two policy meetings with a focus on bolstering the slowing labour market. But policymakers are divided on whether to support another cut at their final meeting of the year in December as they attempt to balance that weakening along with inflation which remains elevated.

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The four-week moving average of new applications, a metric that helps smooth out volatility, eased to 223,750 last week.

Before adjusting for seasonal factors, initial claims increased 25,712 last week. The jump was led by California, Illinois and New York. BLOOMBERG