The number of Americans losing their jobs and applying for unemployment benefits was nearly unchanged last week at 220,000, indicating that businesses continue to hold on to workers even though economic growth appears to have slowed and job openings have declined.
Economists were expecting jobless claims to climb to 222,000 from the initial estimate of 218,000 from the prior week. The earlier figure was revised up to 219,000.
Initial claims for unemployment benefits are a proxy for layoffs. Current levels of claims indicate historically low levels of layoffs.
The Department of Labor will release its monthly employment situation report on Friday. It is expected to show that the economy added 180,000 jobs in November, up from 150,000 jobs in October. The unemployment rate is expected to hold steady at 3.9 percent. Private payrolls are forecast as increasing by 150,000, up from the 99,000 growth last month. A big contributor to the increase is expected to be manufacturing, which shed 35,000 jobs during the autoworkers strike and is seen as adding those back last month.
The Federal Reserve has been trying to cool off demand for labor, fearing that an imbalance between supply and demand could contribute to inflation staying high or even rising again. The economy in 2023 defied predictions that it would slow or even fall into a recession. Instead, growth accelerated through the first three quarters, peaking at a sizzling 5.2 percent annual rate of growth in the third quarter.
As the end of the year approaches, the economy has shown signs of cooling off. The Atlanta Fed’s GDPNOW gauge sees the U.S. economy growing at a 1.3 percent annual rate in the fourth quarter. Many Wall Street analysts think the economy is growing even more slowly than that.
The Labor Department said this week that job openings, an important measure of demand for labor, declined to 8.7 million at the end of October. That is the lowest level of openings since March 2021. Openings have been trending down since peaking at 12 million in March of 2022 and have fallen in five of the last six months.
Because jobless claims can jump around from week to week, economists look to the four-week moving average of claims for clear signal of the strength of the labor market. But lately claims have been remarkably consistent and unvolatile, so the average is close to the weekly figure. The 4-week moving average was 220,750, an increase of 500 from the previous week’s revised average. The previous week’s average was revised up by 250 from 220,000 to 220,250.
Continuing claims during the week ending November 25 came in at 1,861,000, a decrease of 64,000 from the previous week’s revised level. This is a measure of how easily workers find new positions after an initial week collecting benefits. Current levels of continuing claims are low by long-term historical standards but close the the low levels achieved during the presidency of Donald Trump.