The numbers: The number of people who applied for unemployment benefits at the end of October fell slightly to 217,000 and clung near pandemic lows, signaling the labor market is still historically tight and shows little sign of slackening.
Economists polled by the Wall Street Journal had forecast new claims to total 220,000 in the seven days ended Oct. 29. The figures are seasonally adjusted.
The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse.
New unemployment filings are still extremely low despite scattered reports of layoffs at some large companies.
Big picture: The U.S. labor market has been largely unscathed despite a softer economy and rising odds of recession. The Federal Reserve is raising interest rates to try to squelch high inflation, a strategy bound to slow economic growth.
Hiring has declined since early in the year, however, and layoffs are likely to climb if the economy keeps slowing.
Key details: Twenty-seven of the 53 states and U.S. territories that report jobless claims showed a decline and 26 posted an increase/decline.
The biggest increase in new claims occurred in California and Oregon. The only states to report a sizable decline in unemployment filings were Florida and Kentucky.
The number of people already collecting unemployment benefits, meanwhile, rose by 47,000 to 1.49 million. They remain near a 50-year low, however.
One caveat on jobless claims: The government’s adjusted data has been more erratic since the pandemic.
New jobless claims before seasonal adjustments, for instance, were much lower at 185,594 last week. Historically that’s an extremely low reading.
Looking ahead: “While there have been some signs of a loosening in labor market conditions, the job market remains tight, a key reason that the Fed plans to continue to raise interest rates,” said lead U.S. economist Nancy Vanden Houten of Oxford Economics. “We don’t expect a significant rise in claims or unemployment either until we enter a recession in 2023.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades. Stocks fell on Thursday after the Fed indicated it plans to raise interest rates higher than previously expected.
