The number of Americans filing new applications for jobless benefits decreased to 219,000 in the latest week, consistent with a cooling labor market. However, those who have lost work are finding it harder to find a new job and are staying on benefits rolls for longer periods.
According to the Labor Department’s report, initial claims fell by 1,000 from the previous week. The number of people receiving benefits after an initial week rose to 1.91 million, the highest since November 2021. This marks a significant increase in continued claims, which has climbed steadily over the past year.
The average duration of unemployment reached its longest level since April 2022, standing at 23.7 weeks. Despite this, the increase in continued claims is relatively modest, with only about 100,000 more than it was a year ago.
Federal Reserve officials are unlikely to be swayed by this data alone, as they have already lowered interest rates for the third time since September. However, economists note that the labor market’s slowdown may indicate tighter conditions ahead.
“It’s unusual for the rate of hiring and firing not to be inversely correlated,” said Jefferies U.S. economist Thomas Simons. “But current conditions show a scarcity in labor supply, making it valuable to retain rather than replace.”
Source: https://www.reuters.com/markets/us/us-weekly-jobless-claims-fall-slightly-2024-12-26