November 9th 2023.
The U.S. labor market is still showing few signs of a significant slowdown, with new claims for unemployment benefits falling last week. The Labor Department reported that initial claims for state unemployment benefits decreased by 3,000 to a seasonally adjusted 217,000 for the week ended Nov. 4 from an upwardly revised 220,000 in the prior week. This was slightly lower than the 218,000 expected by economists polled by Reuters.
The data revealed that the job market is cooling, with the pace of hiring slowing and unemployment ticking higher, despite the joblessness rate being at an historically low level of 3.9% in October. Additionally, there were 1.5 job openings for every unemployed person in September, down from around 2-to-1 last year.
The Federal Reserve held interest rates steady last week, but left the door open to a further increase in borrowing costs in recognition of the economy's resilience. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose to 1.834 million during the week ending Oct. 28, the highest level since April. However, this trend appears to be due to difficulties adjusting the data for seasonal fluctuations, rather than a material change.
Layoffs remain considerably low, with global outplacement firm Challenger, Gray & Christmas reporting that announced job cuts by U.S.-based employers fell 22% last month from September, though they were up 9% from a year earlier. This further demonstrates that the job market is healthy and steady.
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