Jobless Claims Fall to 197,000, Near Lowest Levels in 57 Years

The number of Americans filing new claims for jobless benefits fell to 197,000 last week, the Labor Department said Thursday.

This was 2,000 lower than the the previous week’s revised estimate and 3,000 below the consensus forecast.

New claims for unemployment benefits are a proxy for layoffs. These have been near the lowest levels in 57 years for the past several week. The four-week moving average of claims, which smooths out weekly volatility, fell to 198,000. This average was hit twice in 2022. Prior to that, average claims have not been that low since 1969.

Despite persistent inflation and an Iran-war driven increase in gasoline prices, consumer spending has been strong this year, business investment and corporate profits robust, and stocks are hitting all-time highs.  Employers are holding on to workers as the labor force grows slowly due to retirements of baby boomers and a slowdown in immigration after the Trump administration began enforcing rules against illegal entry.

Minutes of the Fed’s meeting in September showed that officials view the labor market as “close to maximum employment.” The unemployment rate of 4.2 percent matches the median projection of Fed officials of the longer term rate consistent with two percent inflation.

The number of people receiving unemployment benefits after an initial week climbed by 17,000 to a seasonally adjusted 1.716 million during the week ⁠ended September ​26.