The number of Americans filing for unemployment benefits fell again last week, with initial jobless claims dropping to 197,000, according to the Department of Labor.
Why it matters: Claims fell by 1,000 from the prior week’s revised 198,000. That puts new filings near their lowest levels of the year and matches the late-July reading; claims were last lower during the week ending July 18, when they fell to 189,000.
- The broader trend is also improving. The four-week moving average, which smooths out some of the volatility in the weekly data, fell by 1,750 to 202,250. That’s down from a revised 204,000 the previous week and well below the 236,750 recorded during the comparable period last year.
Continuing claims, which provide a look at how many people remain on unemployment benefits after initially filing, edged up by 2,000 to 1.719 million. However, the four-week average of continuing claims fell by 13,000 to 1.744 million. A year ago, continuing claims stood at 1.916 million.
The big picture: The labor market may not be booming, but there is little evidence of widespread layoffs. Initial claims remain below 200,000, their four-week average continues to decline and continuing claims remain substantially below year-ago levels. Combined with recent evidence of stronger hiring and business activity, the data point to a labor market that remains relatively tight.
The bottom line: The latest claims report is another sign of labor-market resilience. That’s good news for the economy, but with inflation still elevated, continued strength in employment also gives the Federal Reserve more room to keep monetary policy tight as it tries to bring inflation back toward 2%.