Washington — The latest weekly unemployment report shows a modest decline in new claims, suggesting the U.S. labor market is regaining its footing after a summer slowdown. Initial claims for state unemployment benefits slipped by 1,000 to a seasonally adjusted 197,000 for the week ended September 19, according to the Labor Department. Economists surveyed by Reuters had expected 201,000.
Seasonally adjusted figures near historic lows
Claims remain close to 57‑year lows, though analysts note that seasonal adjustments around holidays such as Labor Day can affect the numbers. Some economists also point to residual seasonality that tends to push claims lower as the year progresses.
Hiring remains cautious
Despite the encouraging headline, companies are still hesitant to expand payrolls. Rising energy prices linked to the ongoing US‑Israeli conflict with Iran, along with tariffs on imports, are cited as headwinds. A recent S&P Global survey found firms reporting increasing difficulty finding suitable staff.
Additionally, an immigration enforcement push and a wave of retirements are shrinking the labor supply, further constraining hiring.
Continuing claims rise slightly
The number of people receiving unemployment benefits after an initial week – a proxy for hiring – increased by 2,000 to a seasonally adjusted 1.719 million for the week ended September 12. Economists view this modest rise as consistent with a stable unemployment rate, which held steady at 4.1 % in August.
“If continuing claims remain at lower levels, this could mean an unemployment rate closer to 4 % over the next few months,” said Veronica Clark, an economist at Citigroup. She cautioned, however, that a lower rate driven by a smaller labor force would not necessarily signal a tightening market.
Federal Reserve policy backdrop
Last week the Federal Reserve raised its overnight benchmark interest rate by 25 basis points to the 3.75 %‑4.00 % range, marking the first hike in three years. The central bank signaled that further increases are possible in the months ahead.
The labor market data will likely influence the Fed’s ongoing assessment of inflation pressures and the appropriate pace of monetary tightening.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
