The number of first jobless claims fell dramatically last week, underscoring how employers are hold on tight to the workers because the labor market remains full of opportunities for job seekers.
Initial unemployment insurance claims were 193,000 for the week ended September 24, down 16,000 out of a downwardly revised total of 209,000 claims from the previous week, according to Labor Department data released Thursday.
Economists had forecast that 215,000 weekly claims would be filed, according to Refinitiv estimates.
The last time weekly claims fell below 200,000 was in early May.
The Labor Department said the number of continuing jobless claims for the week ended September 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 fears of recession and the aggressive efforts of the Federal Reserve tear down high inflation. After the pandemic upended the economy and the labor market, employers – especially those in service industries – struggled to return to pre-pandemic employment levels.
In July, there were two job openings for every job seeker, according to monthly data from the Bureau of Labor Statistics.
The central bank wants more slack in the labor market as tighter employment pushes up wages and keeps inflation high. But as the unemployment rate rises, workers lose that bargaining power for higher wages and households reduce spending.
When the Fed announced its latest rate hike last week, it also released projections that unemployment could hit 4.4% next year. Assuming no change in the labor force, this would mean an additional 1.2 million people would be unemployed.
Weekly data on unemployment insurance claims are subject to revision.