The number of Americans applying for unemployment benefits fell to their lowest level in six months last week as layoffs remain at relatively healthy levels.
The Labor Department reported Thursday that jobless claim applications fell by 4,000 to 217,000 for the week of Nov. 9. That’s less than the 225,000 analysts forecast.
The four-week average of weekly claims, which evens out some of the weekly ups and downs, fell by 6,250 to 221,000.
Weekly applications for jobless benefits are considered representative of U.S. layoffs in a given week.
In response to weakening employment data and receding consumer prices, the Federal Reserve slashed its benchmark interest rate in September by a half a percentage point and by another quarter-point last week.
The central bank is shifting its focus from taming inflation toward supporting the job market in an attempt to pull off a rare “soft landing,” whereby it brings down inflation without igniting a recession.
The half-point rate cut in September was the Fed’s first rate cut in four years after a series of increases starting in 2022 that pushed the federal funds rate to a two-decade high of 5.3%.
Despite a slight uptick in October, inflation has retreated steadily the past two years, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
Two weeks ago, the government reported that an inflation gauge closely watched by the Fed fell to its lowest level in three-and-a-half years.
During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the notion that high interest rates were finally cooling a red-hot U.S. job market.
In October, the U.S. economy produced a meager 12,000 jobs, though economists pointed to recent strikes and hurricanes that left many workers temporarily off payrolls.
The Labor Department reported In August that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total was also considered evidence that the job market has been slowing steadily, compelling the Fed to start cutting interest rates.
Continuing claims, the total number of Americans collecting jobless benefits, fell to 1.87 million for the week of Nov. 2, in line with analysts’ expectations.