New applications for unemployment benefits in the United States fell to 196,000 in the week ending September 12, the Department of Labor reported on Thursday, September 17. That is 10,000 fewer than the 206,000 filed a week earlier, a figure the department left unrevised, and the lowest weekly total since mid-July, according to the Associated Press.
Economists surveyed by FactSet had expected 207,500 claims — about 11,500 more than the number that arrived.
The smoothed number came down too
Weekly claims bounce around, dragged by school calendars, holiday weeks and one-off plant shutdowns, which is why the four-week moving average is the figure policymakers tend to watch. It eased to 203,250.
The count of people still drawing benefits after their first week — what the department calls insured unemployment — stood at 1,730,000 for the week ending September 5. The insured unemployment rate fell a tenth of a percentage point, to 1.1%.
The Fed had moved the day before
On September 16, one day before the claims release, the Federal Open Market Committee raised the target range for the federal funds rate by a quarter of a percentage point, to between 3.75% and 4.00%. The vote was unanimous, 12-0.
The committee's statement said inflation "remains elevated" and that the increase would "support a timelier return to the Committee's 2 percent goal." On employment, it offered a flat reading: "Job gains have kept pace with the workforce, and the unemployment rate has changed little."
What the number does and does not say
A claims figure this low is the piece of the picture that makes a rate increase easier to sustain. Layoffs are the most immediate signal that a labor market is cooling, and they are not turning up in the weekly filings: at 196,000, employers are holding on to the workers they have.
What the series does not measure is hiring. Initial claims count people losing jobs, not people finding them, so a low reading says nothing about how quickly someone already out of work is getting hired back. That is the question the continued-claims line speaks to, and at 1,730,000 it is the number to watch in the coming weeks as the Fed's higher rate works its way through.
Reporting from the US Department of Labor, the Federal Reserve and the Associated Press.
