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The number of Americans filing new applications for unemployment benefits eased slightly last week, Haver Analytics estimated on Thursday, pointing to stable labor market conditions that could provide the Federal Reserve cover to keep interest rates unchanged next month.
Initial claims for state unemployment benefits dipped to a seasonally adjusted 227,543 for the week ended November 8 from 228,899 in the prior week, Haver Analytics calculated. The figure was in line with estimates from JPMorgan, Goldman Sachs and Nationwide.Â
The longest government shutdown in history ended on Wednesday night, and the Labor Department is likely to resume publishing the jobless claims report next Thursday.
The 43-day shutdown halted collection, processing and publishing of official economic data. Yet states kept collecting claims data, which Haver Analytics and Wall Street economists have extrapolated to make weekly estimates, using methodology employed by the Labor Department.Â
Claims data was unavailable for Massachusetts and assumptions were made, similar to the Labor Department’s practices. The estimated claims data have suggested there has been no change to what policymakers and economists describe as a “no hire, no fire” labor market.
But there has been a surge in companies announcing layoffs, including Amazon, which some economists say could eventually show up in the claims data next year.
“Initial claims remain pretty similar to recent years around this time, and don’t give the sense of any alarming rise in layoffs, especially when you consider that they may have been lifted slightly by the government shutdown, which was starting to become more disruptive this month,” said Abiel Reinhart, an economist at JPMorgan.
Labor Market Remains In Holding PatternÂ
Some private sector reports have implied the labor market was deteriorating. Most economists have cautioned that these reports have had a poor track record of accuracy, and suggested instead focusing on weekly claims data. While the government is expected to publish September’s delayed employment report next week, it could be months before a clear view of the labor market emerges.Â
“Not much has changed over the past six weeks,” said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets. “While this is not great news, as the labor market was tepid at best prior to the shutdown, it should help to allay the worst fears of policymakers and financial market participants alike.”
Citing inflation worries and indications of relative labor market stability, more Fed policymakers have signaled reticence on further easing, after the central bank cut U.S. rates twice this year.Â
The labor market has lost steam from early this year. Economists blame economic uncertainty, tariffs on imports and AI for the low demand for workers. A sharp reduction in labor supply because of raids on undocumented immigrants is also hurting hiring, especially at small businesses.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, slipped to a seasonally adjusted 1.942 million during the week ending November 1, from 1.956 million, Goldman Sachs estimated. That roughly aligned with calculations from JPMorgan, Haver Analytics and Nationwide.
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(Reporting by Lucia Mutikani; Editing by David Gregorio)
