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Last week, applications for unemployment benefits in the US fell to the lowest level in more than three years.
The Labor Department reported Thursday that the number of Americans applying for jobless benefits for the week ending Nov. 29 fell to 191,000 from 218,000 the previous week.
This is the lowest level since September 24, 2022, when there were 189,000 claims. Analysts surveyed by data provider FactSet had estimated initial claims of 221,000.
Applications for unemployment aid are viewed as a proxy for layoffs and are a close to real-time indicator of the health of the job market. Job cuts recently announced by big companies like UPS, General Motors, Amazon and Verizon typically take weeks or months to be fully implemented and may not be reflected in Thursday’s data.
For now, the US job market is stuck in a “low hire, low fire” situation, which has kept the unemployment rate historically low but left unemployed people scrambling to find new jobs.
on wednesday, Private payroll data firm ADP estimates US job losses 32,000 in November. The surprisingly weak report may be discouraging for people looking for jobs, but it increased expectations that the Fed will cut its key interest rate next week.
It’s unclear how much impact this week’s layoff data will have on the Fed as the numbers can be volatile and subject to revision.
Complicating the Fed’s upcoming decision is inflation, which remains above the central bank’s 2% target. The Fed’s preferred measure of inflation will be released in a government report on Friday and will also be included in its rate calls.
Two weeks ago, the government said hiring accelerated slightly in September, when employers added 119,000 new jobs. That mixed report, which also showed employers shed jobs in August, was delayed by the government shutdown.
The unemployment rate reached 4.4%, its highest level in four years, as more Americans returned to the labor market looking for work, though not all of them found jobs immediately.
The release of comprehensive jobs data for November has been delayed until later this month due to the government shutdown, after the Fed’s meeting.
The government also recently reported that retail sales slowed in September after three months of good growth.
Consumer confidence has fallen to its second lowest level in five years, while wholesale inflation eased slightly.
The data showed the economy and inflation are both slowing, raising financial markets’ expectations that the Federal Reserve will lower its key interest rate at its meeting next week.
If the Fed lowers its benchmark rate next week, it would be its third cut of the year as it tries to support a job market that has been slowing for months.
Labor’s report Thursday also showed that the four-week average of claims, which equalizes some week-to-week volatility, fell by 9,500 to 214,750.
The total number of Americans who filed for jobless benefits fell by 4,000 to 1.94 million in the past week ending Nov. 22, the government said.