Job Claims Fall to Seven-Month Low as Employers Hold the Line on Layoffs
Despite the headlines about layoffs, American companies aren’t laying off many workers.
Americans filed 216,000 new claims for unemployment benefits last week, down 6,000 from the previous week and marking the lowest level since mid-April, the Labor Department reported Wednesday.
The decline defied economists’ expectations that the number of claims would rise to 225,000 and suggests companies remain reluctant to lay off workers despite growing economic headwinds and a series of high-profile layoff announcements.
The number of Americans continuing to collect unemployment benefits increased slightly to 1.96 million for the week ended Nov. 15, hovering near levels last seen during the pandemic recovery. Although initial filings remain relatively low by historical standards, the rise in continuing applications indicates a more challenging environment for job seekers trying to land new positions.
The data paints a picture of a labor market in transition: employers are sharply reducing their hiring, but have not yet resorted to widespread workforce reductions. Companies including HP, ConocoPhillips, General Motors, Paramount, Target, UPS, Verizon and Amazon have announced plans to cut jobs in recent weeks, although those reductions have not been significantly reflected in unemployment statistics.
Weekly claims numbers can be volatile during the holidays, and on an unadjusted basis, new claims jumped last week before Thanksgiving. The four-week moving average, which smooths out these fluctuations, fell to 223,750.
The labor market slowdown has caught the attention of Federal Reserve officials, who have cited employment concerns when cutting interest rates at their last two meetings. But policymakers are divided on whether to make another rate cut at their December meeting, as they weigh persistent inflation against signs of a slowing labor market.
This uncertainty is impacting American workers. Consumer confidence fell in November, the biggest drop in seven months, partly due to dimmer views about the job outlook. Another October survey found that 55 percent of employed Americans fear losing their jobs, while nearly half believe it would take them four months or more to find comparable employment if they were laid off.
Continuing claims have trended higher since September, suggesting that even if companies aren’t laying off workers en masse, those who lose their jobs are taking longer to find new ones, a change from the rapid job switching that has characterized the pandemic-era labor market.
