US Jobless Claims Fall to 194,000, Near Lowest Level Since the 1960s
Initial unemployment claims dropped 6,000 to 194,000 last week, near 57-year lows, even as hiring stays weak and continuing claims rose.
Fewer Americans filed new claims for unemployment benefits last week, bringing applications close to their lowest level in nearly six decades. The data suggest that employers are still holding on to their workers even though hiring has slowed sharply. Initial claims fell by 6,000 to a seasonally adjusted 194,000 in the week ended October 17, the Labor Department said Thursday, October 22.
The figure was lower than the 200,000 that economists surveyed by Reuters had expected. Claims have now been at or below 200,000 for six weeks in a row, Reuters reported.
What the numbers show
Initial claims count people applying for unemployment insurance for the first time, which makes them one of the most up-to-date signs of layoffs in the US economy. According to UPI, the Labor Department described last week’s total as nearly the lowest weekly count since the 1960s. Reuters noted that claims are now close to the 189,000 reached in mid-July, which was the lowest reading since 1969.
Other details in the report:
- The four-week moving average, which smooths out week-to-week swings, was 197,750, according to UPI.
- Unadjusted claims filed under state programs fell by 19,321 to 172,390. That was a larger drop than the seasonal factors had anticipated, UPI reported.
- Continuing claims count people who keep receiving benefits after their first week. They rose 25,000 to 1.728 million in the week ended October 10, which Reuters described as still low.
- The insured unemployment rate held at 1.1%.
Why it matters for households
Few layoffs are good news for people who already have jobs. The rest of the labor market is less encouraging. Economists still describe it as “low-hire, low-fire”: companies are not letting many workers go, but they are not adding many either. Employers added just 29,000 nonfarm jobs in September, down from 133,000 in August. The unemployment rate rose to 4.2%, according to the government’s monthly jobs report.
For people who are out of work, finding a new job has become harder. Reuters reported that the median length of unemployment reached 11.5 weeks in September, close to its highest in four and a half years. The rise in continuing claims also points to slow hiring.
The claims numbers also leave some people out. Recent college graduates and others with little work history usually cannot collect benefits. Long-term jobless workers may have used up their benefits, which last up to 26 weeks in most states. As a result, the figures may understate how many people are struggling to find work.
Economists’ views
Some analysts link the low number of layoffs to a smaller pool of available workers, which Reuters attributed to retirements and the administration’s immigration crackdown. Christopher Rupkey, chief economist at FWDBONDS, told Reuters that “workers are suddenly irreplaceable in many industries.”
Other economists were more cautious. Oliver Allen, senior US economist at Pantheon Macroeconomics, a research firm, said the low claims count offered only limited reassurance. He expects the unemployment rate to keep rising slowly even if claims stay in their current range, Reuters reported. Veronica Clark, an economist at Citigroup, said she would not be surprised by another weak payrolls number for October.
Last week’s claims data cover the same period the government uses to survey employers for the October jobs report. According to Reuters, that points to a modest pickup in hiring. September’s weak gain may partly reflect a timing quirk: payrolls tend to come in low when Labor Day falls late in the survey month.
What comes next for the Fed
The jobs data come as the Federal Reserve, the US central bank, weighs its next move on interest rates. In September, the Fed raised its benchmark overnight rate by a quarter of a percentage point to a range of 3.75% to 4.00%. It is trying to contain inflation pressures linked to higher oil prices from the US-Israeli war with Iran and to import tariffs.
Economists polled by Reuters expect the Fed to hold rates steady at its meeting next week and raise them again in December. Carl Weinberg, chief economist at High Frequency Economics, told Reuters that the central bank’s “employment mandate is clearly satisfied,” which he said leaves room for further increases.
The next major test for the labor market will be the October jobs report, which is due in early November.
