US Applications for Jobless Benefits Remain Near 7-Month Lows

Applications for unemployment benefits throughout the U.S. continues to remain near 7-month lows, according to a new report.

Jobless Claim Applications

Jobless claims dropped by 6,000 to 213,000 for the week ending November 16, the Labor Department reported Thursday. The figure comes in below the 220,000 applications that analysts had projected.

Continuing unemployment claims, which measure the number of Americans receiving jobless benefits, climbed by 36,000 to reach 1.91 million during the week of November 9. This figure exceeded expectations and marked the highest level recorded in three years.

Weekly applications for unemployment aid remain at historically low levels, reflecting a strong labor market. However, rising challenges for those already receiving benefits in securing new employment point to a potential cooling in worker demand, even as the broader economy maintains its strength.

The four-week moving average for weekly unemployment claims, a measure that smooths out fluctuations in the data, dropped by 3,750 to 217,750.

Weekly unemployment applications are widely regarded as an indicator of layoff trends across the United States.

Hiring signs are seen at a Chipotle restaurant in Illinois on November 3, 2024. On Thursday, a new report from the U.S. Labor Department showed unemployment benefit claims remaining near 7-month lows. AP Photo/Nam Y. Huh/AP Photo/Nam Y. Huh

Interest Rates

Reacting to signs of softening employment figures and easing inflation, the Federal Reserve implemented two consecutive rate cuts, lowering its benchmark interest rate by half a percentage point in September and by an additional quarter-point earlier this month.

In September, Federal Reserve officials anticipated four rate cuts in the coming year, following three reductions earlier this year. However, that forecast has shifted significantly in recent weeks.

A series of unexpectedly robust economic reports, coupled with President-elect Donald Trump's proposed policy agenda, has prompted a more cautious stance from the Federal Reserve and signals the possibility of fewer rate cuts and higher interest rates than previously anticipated.

The Federal Reserve has recently adjusted its priorities, shifting from an emphasis on controlling inflation to bolstering the labor market. This pivot reflects its effort to achieve a rare "soft landing," reducing inflation without triggering a recession.

The Federal Reserve's half-point rate reduction in September marked its first cut in four years, following a series of hikes beginning in 2022 that elevated the federal funds rate to a 20-year peak of 5.3 percent. Inflation has steadily declined over the past two years, edging closer to the Federal Reserve's 2 percent target despite a modest increase in October. Fed Chair Jerome Powell recently stated that inflation is now largely under control.

Past Reports on Unemployment Applications

During the first four months of 2024, weekly applications for unemployment benefits averaged a low 213,000 before climbing in May and reaching 250,000 by late July. The increase bolsters the view that high interest rates are beginning to temper the overheated U.S. labor market.

In October, the U.S. economy added a modest 12,000 jobs, a figure economists attribute in part to the impact of recent strikes and hurricanes that temporarily sidelined many workers from payrolls.

The Labor Department revealed in August that the U.S. economy created 818,000 fewer jobs between April 2023 and March 2024 than initially reported. The downward revision underscored a steady cooling in the job market, a trend that prompted the Federal Reserve to begin cutting interest rates.

This article includes reporting from The Associated Press.