Job market remains tight as initial claims drop again

Initial claims for regular state unemployment insurance fell by 16,000 for the week ending September 24The tenth, coming in at 193,000. Last week’s 209000 was revised down from the initial number 213,000 (see first chart). Claims have fallen in six of the past seven weeks and are at their lowest level since April 23research and development. When measured as a percentage of nonfarm payrolls, claims came in at 0.160 percent for August, down from 0.171 in July but still above the record low of 0.117 in March (see second chart).

The four-week average fell to 207,000, down 8,750 from the previous week. After showing an ongoing upward trend since the last low in early April, the four-week average from April to mid-August rose but started to trend downward again. Overall, the data still points to a tight job market. However, persistently high rates of price increases, the Fed’s severe tightening cycle, and the fallout from Russia’s invasion of Ukraine pose risks to the economic outlook.

The number of ongoing claims for government unemployment programs reached 1.276 million for the week ending September 10The tenth, up 6,029 from the previous week (see the third chart). Ongoing government claims have remained relatively flat in recent weeks (see chart three).

The latest results for joint federal and private programs put the total number of people claiming benefits in all unemployment programs at 1.302 million for the week ended September 10.The tenth, an increase of 6,855 over the previous week. The latest result is the 31st week in a row below 2 million.

The overall low level of claims coupled with the large number of open jobs indicates that the labor market remains strong. A tight labor market is an important component of the economy, providing support for consumer spending. However, aggressive Fed policy raises borrowing costs for consumers and businesses and raises doubts about future demand. The prospects remain highly uncertain.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 after more than 25 years researching financial and economic markets on Wall Street. Previously, Bob was Head of Global Equity Strategy for Brown Brothers Harriman, where he developed an equity investment strategy that combines top-down macro analysis with upward fundamentals.

Prior to BBH, Bob was Chief Equity Analyst at State Street Global Markets, Chief Economist at Prudential Equity Group and Chief Economist and Financial Markets Analyst at Citicorp Investment Services. Bob holds an MA in Economics from Fordham University and a BA in Business Administration from Lehigh University.

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