US unemployment applications fall, layoffs remain at historically well levels

Fewer Americans filed for unemployment benefits last week as layoffs remained at historically well levels despite elevated profit rates.

The Labor Department reported Thursday that jobless claim applications fell by 12,000 to 216,000 for the week of Oct. 26. That’s fewer than the 227,000 analysts approximate.

The four-week average of weekly claims, which quiets some of the week-to-week fluctuations, fell by 2,250 to 236,500.

Weekly applications for jobless benefits are considered a proxy for U.S. layoffs.

In response to weakening employment data and receding customer prices, the Federal safety net cut its standard profit rate in September by a half of a percentage point as the central financial institution shifted its focus from taming worth rise toward supporting the job economy. The Fed is trying to pull off a rare “soft landing,” whereby it brings down worth rise without tipping the economy into a downturn.

It was the Fed’s first rate cut in four years after a series of increases starting in 2022 that pushed the federal funds rate to a two-decade high of 5.3%.

worth rise has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.

Also Thursday, the government reported that an worth rise gauge closely watched by the Fed fell to its lowest level in three-and-a-half years.

During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the concept that high profit rates were finally cooling a red-warm U.S. job economy.

In August, the Labor Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total was also considered evidence that the job economy has been slowing steadily, compelling the Fed to commence cutting profit rates.

Despite some signs of labor economy slowing, America’s employers added a surprisingly powerful 254,000 jobs in September, easing some concerns about a weakening job economy and suggesting that the pace of hiring is still solid enough to back a growing economy. The Labor Department issues its October jobs update on Friday.

Continuing claims, the total number of Americans collecting jobless benefits, declined by 26,000 to 1.86 million for the week of Oct. 19. Last week’s figure, which had been the most in three years, was revised down by 12,000.