U.S. Weekly Jobless Claims Drop to Seven-Month Low

U.S. Jobless Claims Hit Seven-Month Low Amid Labor Market Adjustments

The number of Americans filing for new unemployment benefits dropped to a seven-month low last week, signaling a potential rebound in job growth for November after setbacks from hurricanes and strikes in October. However, the Labor Department's report on Thursday revealed it is taking longer for the unemployed to find new jobs, with unemployment rolls rising to levels last seen in late 2021.

This labor market softening, alongside persistent inflation challenges, keeps the possibility of another Federal Reserve interest rate cut in December. “There is no sign of incipient recession in these figures,” said Carl Weinberg, chief economist at High Frequency Economics. “The labor market is softening but not imploding.”

Key Highlights:

• Initial Claims: State unemployment benefits claims fell by 6,000 to a seasonally adjusted 213,000 for the week ending Nov. 16, the lowest since April. Economists had expected 220,000 claims.
• Unadjusted Data: Claims decreased by 17,750 to 213,035, with significant declines in states like California, New Jersey, Ohio, Georgia, Texas, and Indiana. California’s filings nearly reversed a prior surge.
• Hurricanes and Strikes Impact: Job growth in October was sharply affected by disruptions from Hurricanes Helene and Milton, as well as strikes at Boeing and another aerospace company. These events likely reduced payrolls by 100,000–125,000 jobs last month.
• Job Market Recovery: The Boeing strike has ended, and rebuilding efforts are underway in hurricane-hit areas, potentially contributing to a strong recovery in November’s payrolls.

Economic Implications:
Continuing unemployment claims, a hiring proxy, rose by 36,000 to 1.908 million for the week ending Nov. 9, reflecting lingering effects from the hurricanes and Boeing-related furloughs. Despite this, layoffs remain historically low, cushioning the labor market from the impact of slower hiring.

The labor market's trajectory will be a crucial factor in the Federal Reserve's decision on another potential rate cut in December. After recent rate reductions aimed at tackling inflation, policymakers are closely monitoring employment trends. November’s jobs report, set to include data from the survey period covered in this week’s claims report, will provide further clarity.