Washington.– The number of Americans applying for unemployment benefits fell last week to its lowest level in four months.
Claims fell 4,000 to 218,000 for the week ending Sept. 21, the Labor Department reported.
That’s the lowest since mid-May and less than the 224,000 analysts had expected. Last week’s figure was revised up 3,000. The four-week average, which smooths out some of the week-to-week volatility, fell 3,500 to 224,750.
The unemployment benefits filings figure is considered a reflection of the number of layoffs in the United States in a given week.
Weekly applications for unemployment benefits have been declining for two straight weeks after a modest increase in early spring. While they remain at healthy levels, recent increases in the number of claims and other labor market data suggest that high interest rates are finally taking their toll on the labor market. In response to weak employment numbers and muted inflation pressures, the Federal Reserve last week cut its key interest rate by half a percentage point as the central bank focuses on shoring up the labor market. The Fed’s goal is to achieve a “soft landing,” meaning curbing inflation without causing a recession. It was the Fed’s first rate cut in four years after a series of rate hikes in 2022 and 2023 pushed the federal funds rate to a two-decade high of 5.3 percent. Inflation has been steadily receding, moving closer to the Federal Reserve’s 2 percent target and prompting Chairman Jerome Powell to recently declare it was largely under control. Through the first four months of 2024, applications for unemployment benefits averaged just 213,000 a week before rising in May. They reached 250,000 in late July, supporting the idea that high interest rates were finally cooling a heated U.S. labor market.
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