Weekly applications for unemployment insurance in the United States have declined significantly, reaching their lowest level since May, according to the latest government data released on Thursday. In the week that ended on September 14, the seasonally adjusted number of initial claims fell by 12,000, bringing the total to 219,000.
This marks the lowest count since the week ending May 18, defying analyst expectations that had predicted claims would settle around 230,000, as noted in a survey compiled by Bloomberg. The previous week’s figures were also revised upwards by 1,000, changing the total from 230,000 to 231,000. Further analysis reveals that the four-week moving average of initial claims stood at 227,500, reflecting a decrease of 3,500 from the prior period, which itself had been revised upwards by 250.
Meanwhile, unadjusted claims saw a weekly increase of 6,436, culminating in a total of 184,845. Commenting on these developments, Nancy Vanden Houten, Senior US Economist at Oxford Economics, expressed caution regarding the implications of this one-week decline. In a statement shared via email with MT Newswires, Vanden Houten remarked, "We don't read much into the one week's decline because seasonal factors may have played a role.
Continued jobless claims, which track initial claims with a lag, continue to drift lower, and we expect that trend to persist in the weeks ahead." In examining the data for the week ending September 7, it was reported that seasonally adjusted continuing claims totaled 1.83 million, falling short of Bloomberg's consensus estimate of 1.85 million.
Continuing claims experienced a decline of 14,000 from the previous week’s average, which was also revised downward by 7,000. The four-week moving average for continuing claims came in at 1.84 million, indicating a decrease of 6,500 from the previous week’s downwardly adjusted average, according to DOL. On a state-by-state basis, Nebraska experienced the highest increase in initial claims for the week ending September 7, with a rise of 628 claims.
Wisconsin and Iowa followed suit with increases in their claims. Conversely, New York saw the most significant drop, with claims declining by 2,878, followed by California with a decrease of 1,370 and Ohio with 1,086. In a related monetary policy shift, the Federal Reserve's committee announced a reduction in its benchmark lending rate by 50 basis points, adjusting the range to between 4.75% and 5%.
The committee indicated in a statement that they now have greater confidence that inflation is moving sustainably towards the targeted 2% rate and assessed that the risks involved in achieving both employment and inflation goals are comparatively balanced. Vanden Houten highlighted this context with the remark, "The Fed sent a strong signal that it will likely lower rates another (50 basis points) this year to preserve current labor market conditions, and one week's claims data doesn't alter that." .