The number of people filing for unemployment benefits last week fell to the lowest level in nearly four months even as the labor market showed other signs of softening.
Last week’s reading was adjusted higher, to 222,000.
While claims have been trending lower after peaking at an 11-month high in July, they are above the numbers observed earlier this year.
Continuing jobless claims—the number of individuals still receiving unemployment benefits—rose to 1.834 million for the week that ended on Sept. 14. This is up from the downwardly revised 1.821 million. Likewise, continuing claims have been edging lower since touching a near three-year high in July.
The four-week average, which removes week-to-week volatility, slipped to 224,750 from 228,250. This is the lowest reading since June.
Snapshot of the US Labor Market
But while economic growth remains intact, the labor market is softening, according to Bill Adams, the chief economist for Comerica Bank.“Initial jobless claims are very low, but continued jobless claims have risen notably over the last two years,” Adams said in a note viewed by The Epoch Times. “That means few workers are being laid off, but those who do lose jobs aren’t finding new work as quickly.”
The Bureau of Labor Statistics’ recent job openings and labor turnover summary showed that the number and rate of hires were little changed in July. In addition, the number and rate of layoffs and discharges were also flat.
In the first eight months of 2024, U.S.-based companies have announced nearly 537,000 layoffs, down by close to 4 percent compared with the year-ago period, according to data released earlier this month by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Hiring has also slowed, with plans to take on additional staff falling to the lowest year-to-date total since Challenger introduced the series in 2005.
“Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management,” Andrew Challenger, the firm’s senior vice president, said in a statement.
Similar trends were identified in RedBallon’s Labor Day 2024 report, which found that 75 percent of employers were neither hiring nor firing, according to an email sent to The Epoch Times.
Job hunters are also reporting a tougher labor market.
RedBalloon’s latest Freedom Economy Index—a monthly survey of 100,000 job seekers and employees—showed that 63 percent said it was “much more” or “somewhat more” difficult to find employment than it was six months ago.
Indeed, the U.S. economy has witnessed a sharp jump in the number of job seekers, according to the Federal Reserve Bank of New York’s labor market survey, which is conducted every four months.
The proportion of individuals who reported searching for employment surged to 28.4 percent in July, up from 19.4 percent from the previous year.
The Conference Board’s Consumer Confidence Index tanked this month, driven by growing worries about the labor market.
“The deterioration across the Index’s main components likely reflected consumers’ concerns about the labor market and reactions to fewer hours, slower payroll increases, fewer job openings—even if the labor market remains quite healthy, with low unemployment, few layoffs and elevated wages,” Dana M. Peterson, chief economist at The Conference Board, said.
The rule is named after former Fed economist Claudia Sahm, and it signals that an economy could be in a recession if the three-month jobless rate average moves up by 0.5 percent or more relative to its low during the previous 12 months.
A chorus of economists has shrugged off the higher unemployment rate, citing an increase in labor supply.
“A read across the labor data [shows] that higher unemployment is caused by slower hiring, rising labor-force participation ... and more recent immigrants are entering the job market and taking longer to find work than job hunters who’ve been in the country longer,” Adams said.
The September jobs report will be released on Oct. 4. Early forecasts suggest the economy created 130,000 new jobs, and the unemployment ticked up from 4.2 percent to 4.3 percent.
Though Fed officials have stated that the jobs arena has significantly cooled from post-crisis overheating, Andrew Crapuchettes, the CEO of RedBalloon, is optimistic about the future.
“The labor market has definitely been deteriorating over the past year, and there’s still plenty of caution out there. But there’s also signs that things may be ready to turn around in a major way,” Crapuchettes said. “As the economy responds, small-business owners will feel FOMO [fear of missing out] pressure to emerge from their hiring hibernation and begin shopping for new employees.”
As the Federal Reserve kicks off its easing cycle, Comerica’s chief economist says “lower rates will fuel a recovery of job growth and likely stabilize the unemployment rate around its current level in 2025.”
