The number of first-time unemployment benefit claims fell significantly last week, underscoring how employers are holding on to workers as the job market remains full of opportunities for job hunters.
Initial claims for unemployment insurance were 193,000 for the week ended Sept. 24, down 16,000 from a downwardly revised total of 209,000 claims from last week, according to data from the Ministry of Labor released on Thursday.
Economists had predicted that 215,000 weekly applications would be submitted, according to estimates at Refinitiv.
The last time weekly claims fell below 200,000 was in early May.
The Labor Department said the number of pending jobless claims for the week ended Sept. 17 fell by 29,000 to just under 1.35 million, the lowest level since early July.
The labor market has remained robust this year despite recession fears and the Federal Reserve’s aggressive efforts to curb high inflation. After the pandemic threw the economy and labor market into upheaval, employers – especially those in service industries – have struggled to regain their pre-pandemic employment levels.
In July, there were two job openings for every person looking for a job, according to monthly data from the Bureau of Labor Statistics.
The central bank wants more slack in the labor market, since tight employment pushes up wages and keeps inflation up. But as unemployment rises, workers lose bargaining power for higher wages and households cut back on spending.
When the Fed announced its latest rate hike last week, it also released estimates that the unemployment rate could rise to 4.4% next year. Assuming no change in the labor force, that would mean 1.2 million more people would be unemployed.
Weekly unemployment claims data is subject to revisions.