Fewer Americans filed for unemployment benefits last week, keeping initial jobless claims near their lowest levels in 57 years.
Unemployment claims fell to 194,000 in the week ending Oct. 24, the Department of Labor said on Oct. 29, down from 195,000 in the previous week. This came in firmly below the consensus estimate of 199,000.
Claims have been below the 200,000 mark for six of the past seven weeks and have been in a historically low range of 189,000 to 230,000 this year.
Removing week-to-week volatility, the four-week average slipped below 197,000.
Recurring claims—a proxy for hiring trends, as they reflect ongoing joblessness—declined by 21,000 to 1.701 million. This represented the lowest level since March 2023.
Despite another week of solid claims, employment pressures could start building after the recent layoff announcement.
Over the past month, many major companies have announced job cuts, with some citing their artificial intelligence (AI) investments for the decision.
Netflix, Qualcomm, eBay, Barclays, and Electronic Arts are among the firms trimming headcount, according to tech layoff tracker Layoffs.fyi.
Microsoft also offered voluntary buyouts to 60,000 employees this week.
Next week, global outplacement firm Challenger, Gray and Christmas will release its report spotlighting planned layoffs by U.S.-based firms. These numbers could support or hinder the oft-described “low-fire, low-hire” job market.
The October jobs report, scheduled for release on Nov. 6, will show whether hiring momentum is building.
An early estimate from Trading Economics forecasts 40,000 new jobs and an unemployment rate remaining flat at 4.2 percent.
“Monthly nonfarm payrolls have historically been the most watched indicator of labor market health,” economists at Indeed Hiring Lab said in an Oct. 22 research note.
They added that during a time of low population growth and structural change, “indicators of dynamism have renewed importance.”
Consumers turned more optimistic about current employment conditions in October, according to The Conference Board’s Consumer Confidence Index, which rebounded sharply from its lowest level since April 2014.
‘Growing Faster Than Expected’
The Labor Department’s employment figures come as new data suggest the U.S. economy could be heating up.
Real GDP growth accelerated to 3.4 percent in the third quarter—beating economists’ expectations—driven by robust consumer spending and business investment.
“The economy is on fire right now,” Jamie Cox, managing partner of Harris Financial Group, told The Epoch Times in an emailed note.
But inflation continues to lurk in the background as price pressures picked up last month.
September’s Personal Consumption Expenditure (PCE) Price Index—the Federal Reserve’s go-to inflation gauge—rose to 3.6 percent from a year ago. Excluding food and energy, the annual core PCE inflation rate ticked up to 3.1 percent.
Both readings are well above the Fed’s 2 percent inflation target.
“Today’s reports show an economy that is growing faster than expected but is still generating too much inflation for the Federal Reserve’s comfort,” Chris Osmond, Chief Investment Officer of Fifth Third Wealth Advisors, told The Epoch Times in an emailed note.
The Fed left interest rates unchanged on Oct. 29, but left the door open to a quarter-point hike in December.
While futures markets widely anticipate additional end-of-year tightening, monetary policymakers will digest a fresh batch of key data.
Officials will weigh two job reports and the October Consumer Price Index before deciding.
Early estimates suggest consumer inflation may have stalled this month, with the Cleveland Fed forecasting the annual inflation rate holding steady at 3.7 percent. The 12-month core inflation rate is also anticipated to dip to 2.5 percent.
“Yesterday’s decision to hold rates preserved policy flexibility. Today’s data makes that flexibility more likely to be used for another increase than for an extended pause,” Osmond added.
