The number of Americans filing new unemployment benefits applications fell to a four-month low last week, indicating strong job growth in September and affirming that the economy continued to expand in the third quarter.
Thursday’s weekly jobless claims report from the Labor Department, which provides timely insights into economic health, revealed that the number of individuals receiving unemployment benefits decreased to levels not seen since early June.
On Wednesday, the U.S. central bank reduced interest rates by 50 basis points to a range of 4.75-5.00 percent. This marked the first cut in borrowing costs since 2020, with Federal Reserve Chair Jerome Powell emphasizing that this decision reflects policymakers’ commitment to maintaining low unemployment.
Initial claims statistics
Initial claims for state unemployment benefits declined by 12,000 to a seasonally adjusted 219,000 for the week ending September 14, the lowest level since mid-May. Economists surveyed by Reuters predicted 230,000 claims for the week.
Unadjusted claims
Unadjusted claims rose by 6,436 to 184,845 last week, driven by significant increases in California, Texas, and New York, which outweighed a decrease of 2,055 in Massachusetts. Although the labor market has cooled, with a notable drop in hiring and job openings, layoffs remain low, supporting the economy through strong consumer spending.
Read more: U.S. aims for $250 billion in revenue with new corporate tax rules
Economic growth projections
Economic growth estimates for the third quarter hover around a 3.0 percent annualized rate, consistent with the 3.0 percent growth seen in the second quarter, surpassing the 1.8 percent rate the Fed considers its long-term, non-inflationary potential.
The central bank had earlier increased its benchmark overnight interest rate by 525 basis points during 2022 and 2023. Claims have remained relatively stable since falling from an 11-month high of 250,000 in late July, a spike primarily attributed to temporary shutdowns in the automobile sector.
For more economy news, click here.
