US jobless claims drop to 190,000, lowest level since September

APPLICATIONS for US unemployment benefits unexpectedly fell last week, sliding to the lowest level since September and underscoring a strong jobs market where many businesses are reluctant to let go of workers. 

Initial unemployment claims decreased by 15,000 to 190,000 in the week ended Jan 14, Labor Department data showed Thursday (Jan 19). The median forecast was for 214,000 applications.

Continuing claims, or the number of people who have already filed an initial application and are now claiming unemployment benefits, rose to 1.65 million in the week ended Jan 7. That followed back-to-back declines in the previous two weeks.

The data can be particularly volatile and difficult to seasonally adjust around holidays. The four-week moving average in initial claims, which smooths out some of the week-to-week volatility, edged down to 206,000, the lowest since mid-May. 

While high-profile firms in the finance, technology and real estate sectors have announced tens of thousands of job cuts in recent months, the broader labour market remains strong. The unemployment rate closed 2022 at a five-decade low of 3.5 per cent, and firms continue to hire at a solid pace amid resilient consumer demand.  

That said, many economists expect further lay-offs in the months ahead, as the Federal Reserve’s interest rate hikes hit the economy.

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On an unadjusted basis, initial claims fell by 53,582 to 285,575. The declines were broad-based across states, and were led by New York, Georgia and Michigan. There was an increase in California, where the figures may have been impacted by severe flooding in the state. BLOOMBERG